Report and Government response published
Scope of the inquiry
The apprenticeships programme in England seeks to address two key problems: poor UK productivity compared with many international competitors; and a significant fall in employers’ investment in training in recent decades. The programme aims to develop people’s knowledge, skills and behaviours required for their occupation. Public spending on apprenticeships increased from £1.2bn in 2010-11 to £1.6bn in 2017-18. The budget for 2018-19 is £2.2bn.
The Committee's 2016 report on apprenticeships concluded that it was unclear how the Department for Education (DfE) would monitor the success of the programme in important areas, such as the programme's ability to meet the needs of employers. The report also raised concerns that a new apprenticeship levy for employers might incentivise some employers to exploit the system. In spring 2017, government introduced the 0.5% levy for employers with a pay bill of more than £3m. Levy-paying employers can use this money, plus a 10% government top-up, to pay for apprenticeship training and assessment. The number of apprenticeship starts, however, fell substantially after the levy was introduced in April 2017; almost a third of learners reach the end but do not achieve their apprenticeship; and the proportion of new apprentices from disadvantaged areas was lower in 2017/18 than in 2015/16.
A recent National Audit Office (NAO) report concludes that, despite making changes to the programme, DfE has not enticed employers to use available funds or encouraged enough potential recruits to start an apprenticeship. For example, the number of apprenticeship starts fell substantially after the levy was introduced in April 2017. In addition, the NAO found that, although DfE has improved its performance measures, it is still not clear how it demonstrates the impact of the programme on economic productivity. The ESFA also has limited assurance that apprentices are spending at least 20% of their time on off-the-job training.
Members will use this hearing to questions officials from the Department for Education, the Education and Skills Funding Agency (ESFA), and the Institute for Apprenticeships about the value of the apprenticeships programme and effectiveness of its oversight. Moreover, Members may wish to question the future affordability of the apprenticeships programme.