Last week the government launched its new apprenticeship campaign #FireItUp. But, with apprenticeship starts still lagging behind target, does the government need to refresh its strategy?

At the 2015 General Election, David Cameron’s manifesto committed to a target of three million new apprenticeship starts by April 2020. Theresa May repeated this commitment at the snap election in 2017, with the policy appearing to have firmly made its way into core Conservative Party narrative. But with only just over a year left to reach the target, and with starts still down, the government appears to have dropped the ball.

The ill-fated levy

Blame for issues to date has largely been directed towards the decision to introduce the apprenticeship levy. Whilst the notion of the levy was largely welcomed, in practice it has been criticised for being “overly bureaucratic” and overly rigid – to the extent that less than 10 per cent of income raised from the levy has been spent.

Out with the old, in with the new 

The government has also received criticism over the implementation of the new apprenticeship standards which replace the legacy system of frameworks. With the 2020 deadline to have fully-transitioned from frameworks looming, there has been criticism of the bureaucracy and delay in approving the new standards from both providers and employers alike.

Many of the ‘trailblazer’ employers who were tasked with developing the standards have yet to receive approval from the Institute for Apprenticeships (IFA), meaning they are still operating without choice under a framework system that has been deemed “redundant” and of insufficient quality by the government.

Tinkering with the faults

Seeking to fix the faults of the levy, Chancellor Philip Hammond announced a review at Conservative Party Conference in September. He pledged to “engage with business on our plans for the long-term operation of the levy”. Reports trailing the announcement hinted reforms could include enabling employers to share up to 25 per cent of their funds with businesses in their supply chain and increasing the availability of courses in STEM subjects.

The Chancellor has already committed to halving the co-investment rate for small businesses, backed-up by £240 million of funding. Hammond also laid out plans, and crucially funding, to support the IFA in identifying gaps in the training provider market and in clearing the backlog of apprenticeship standards awaiting approval.

Apprenticeship reform will also see collaboration between HM Treasury and the Department for Education, with ministers Robert Jenrick and Anne Milton working with a range of employers and providers to consider the impact of the apprenticeship levy across sectors and regions in England.

But for many, including big industry voices, the reforms aren’t likely to go far enough. Commenting on Hammond’s announcement, Dr Adam Marshall, Director General of the British Chambers of Commerce, said “the measures announced today are an important step in the right direction… but the Chancellor must introduce greater flexibility to the apprenticeship system”.

Apprenticeship renaissance?

In an attempt to reinvigorate the apprenticeship system once again, Education Secretary Damian Hinds last week launched the #FireItUp campaign. The campaign seeks to expand the apprenticeship offering to include more ‘white-collar’ jobs like accountants, actuaries and teachers. Hinds has called it a “sad truth that outdated and snobby attitudes are still putting people off apprenticeships”, and that he wants to “shift deeply held views” of apprenticeships.

Hinds has also commended apprenticeships as an alternative to university degrees, saying that three years in an apprenticeship can be just as valuable, and workers don’t end up saddled with up to £50,000 of debt. This comes at the same time as record numbers of first-class degrees were awarded last summer, an increase of more than double in a decade.

Apprenticeship reform

With reforms on the table, is it now time to iron out some of the creases in a well-intentioned, but poorly executed system?

As Hinds suggests, his vision for apprenticeships sees them becoming the norm for white-collar jobs. The challenge therefore is to adapt a system which has traditionally served industries like engineering and construction, into one that suits 83 per cent of Britain’s workforce – the service sector.

Given the areas that government have already shifted on, including reforms to the co-investment rate, there could be scope for further reform if the sector can demonstrate benefit to both the Treasury and DfE – both in terms of economic value and in enabling more people to access quality training opportunities.

The government is keen to reconnect with business following claims that Theresa May has let relationships with business groups slide. Add to this the growing pressures of Brexit and its potential impact on the UK’s productivity and workforce, it is likely that government will be looking to appease business where it can. However, this creates a risk that providers, i.e. those actually delivering apprenticeships, will not be given due consideration during this process – which will ultimately be to the detriment of the sector and of government.

Despite its publication seemingly caught up in a Brexit gridlock, the higher education sector is braced for the highly anticipated Augar Review of post-18 education.

Launched by the Prime Minister just over a year ago to tackle concerns over high tuition fees and spiralling repayments rates, the review is set to make a number of wide ranging – and potentially sector shocking – recommendations that send a tough message to universities about value for money.

Numerous leaks from the inquiry and rumours over its potential recommendations have been shared over the last couple of months, but it remains to be seen if Augar will set out radical, long-term higher education reform, or if his review will fall flat on arrival.

 What’s Augar got in store?

The most attention-grabbing rumour is that the review is expected to recommend a cut in tuition fees. Reports suggest this would vary depending on the degree, with prices potentially falling as low as £6,500 for most students on arts and humanities courses, and STEM subjects more than doubling to £13,500 or more. This premium level is intended to reflect both the costs involved in running an intensive laboratory-based subject such as medicine, and the additional earnings expected by graduates.

Estimates have put the cost of such a cut at around £3 billion. Unsurprisingly, this hasn’t settled well with the sector, with heads of universities warning of the devastating impact this would have on teaching and research, particularly as the extent of any replacement funding from government remains unclear.

Besides issues with funding, the sector has suggested this would create a ‘two-tier’ system, with lower funding and consequently lower status for courses in the arts and humanities compared to other subjects. This would also have consequences for social mobility, with poorer students being pushed away from more expensive degrees and onto cheaper courses.

The Russell Group has recently come out to warn this approach would lead to a de facto cap on student numbers, particularly if the funding gap isn’t covered by the Treasury. This argument is likely to face a strong push back from government, with recently appointed Universities Minister Chris Skidmore being clear on his opposition to a cap. However, if courses come under pressure due to cuts in funding, this could become a reality for many universities in England.

In addition to fee cuts, the Augar Review team is rumoured to be considering a minimum A-level grade threshold for student loans, with students who fail to achieve three Ds at A-level becoming ineligible. Similarly, this has been branded as a further blow to disadvantaged students, with MillionPlus, a group representing almost half of the UK university sector, criticising the move as a “cap on aspiration”. Vice-chancellors have also argued this would reduce disadvantaged student numbers “by the back door”, going directly against the DfE’s, and the Prime Ministers’ own, social mobility agenda.

 How likely is this?

A headline cut in fees will be seen as an important outcome by No.10, with political commentators viewing the decision to launch a review as an attempt to reconcile the Conservatives’ poor electoral performance in 2017 among young people. As such, the government will be under pressure to agree proposals that reduce the overall cost for students, or come up with a ‘retail offer’, to compete with Labour’s pledge to abolish fees in a general election. However, the Treasury is unlikely to be keen to provide additional funding for universities at a time of uncertainty about future public finances post-Brexit.

It’s clear that universities are expecting this to be a challenging review. Arts institutions are most likely to be holding their breath, with ministers having been dismissive of their role since the review was launched. With the additional pressure from Brexit, the creative industries are feeling particularly at risk.

Beyond the arts, any cut in tuition fees could have a considerable impact on scientific research and teaching, reducing the government’s chances of meeting its target for research and development spending, and undermining its own Industrial Strategy. Again, with Brexit looming on the horizon, the drive to deliver growth and improve productivity is more important than ever, and universities have a major part to play.

Whatever Augar decides to recommend, he has been set a difficult task of finding attractive solutions without incurring significant additional government expenditure or a loss of income for universities. With tuition fees the most politically contentious issue being considered, the sector seems likely to face tough questions about the value for money they offer for students, while continuing to face pressure to widen access for disadvantaged groups.

Skidmore has attempted to reassure the sector by stating that any funding changes would be subject to consultation and introduced gradually, offering longer-term opportunities to influence the government’s final approach. While there has been a strong sector-wide lobby to date, HE providers now need to consider their individual positions within this debate and ensure they can demonstrate the value of their specific provision and the need to protect funding for, and access to, their courses.