The Institute of Fiscal Studies Report on apprenticeships
LINK raised a number of key issues: I draw particular attention to the highlighted issue of concern to us in Brent over the College of North West London alleged fraud by a subcontractor which led to 78 students missing out due to a non-existent course
LINK:
- Although the apprenticeship levy increases taxes on large employers,
the new subsidies for employers to train apprentices mean that employers will have to pay nothing, or at most 10%, of off-the-job training costs for apprentices,
up to certain price caps set by the government. This will increase the
incentive to employers to hire apprentices, particularly those aged 19
and over for whom employers paid at least 50% of training costs prior to
2017.
- This zero or near zero cost of training poses considerable risks to the efficient use of public money.
Employers will have little incentive to choose training providers who
can provide training at a lower price. Employers will also have a big
incentive to re-label existing training schemes as apprenticeships.
- The target of an average of 600,000 new apprentices a year
in this parliament is a 20% increase on the level in 2014–15. This large
expansion risks increasing quantity at the expense of quality. Although
the government is trying to increase the quality of apprenticeships,
the Institute for Apprenticeships may come under pressure to approve new
apprenticeships quickly. Ofsted will take on an expanded (and welcome)
role with respect to inspecting training providers and employers.
However, it has already expressed serious concerns about the quality of
apprenticeship schemes, particularly those created more recently.
- The apprenticeship levy will put downward pressure on wages.
The Office for Budget Responsibility assesses that it will reduce wages
by about 0.3% by 2020–21. While only 2% of employers will pay the levy,
at least 60% of employees work for employers who will pay the levy.
- The government has set every public sector employer with at
least 250 employees in England a target that 2.3% of their workforce
must start an apprenticeship each year. This takes no account
of big differences between organisations. Unless existing employees
start apprenticeships, the targets imply around one-in-five new public
sector hires must be an apprentice. Such a blanket policy cannot be an
efficient way to improve skills in the public sector. It risks costly
reorganisation of training and inefficient ways of working. These
targets should be removed.
- The government has also failed to make a convincing case for such a large and rapid expansion in apprenticeships. In
seeking to justify these changes, it quotes statistics that show a
collapse in employees’ training. However, better measures of training
show a much more modest decline. The government also makes wildly
optimistic claims about the extra economic activity or earnings such
investment in apprenticeships could generate (with quoted
benefit-to-cost ratios of over 20:1). While there is a clear need for a
better-trained workforce, this cavalier use of statistics risks
undermining what might be a perfectly sensible case for a gradual
expansion of apprenticeships in areas where quality can be assured.
I can reveal that the company involved in the alleged apprenticeship scheme fraud at the College of North West London was Keyrail Training Ltd/Keyrail Training Solutions Ltd, an Approved Apprenticeship Training Agency listed at the Skills Funding Agency.
Interestingly this notice was posted on the Companies House site revealing that it was dissolved in May 2016.
However the company remained on the Skills Funding Agency (SFA) Declared Subcontractors List in September 2016 with an entry of £256,000 for the College of North West London. It was removed from the list in January 2017. The entry for May 2015 had been under the name of Keyrail Training Ltd and was for £100,000 for the College of North West London.
The alleged fraud was uncovered in the summer of 2016 and the removal from the list may have followed the result of that investigation being reported to the SFA.
The extent of the alleged fraud clearly supports the IFS concerns but also raises the whole issue of governance of the FE sector, monitoring and audit arrangements, the role of the SFA and risks associated with the privatisation of the sector and the lack of democratic accountability. There is also concern that Indro Sen, the UCU representative at CNWL who assisuously pressed for a full investigation into the issue remains suspended by CNWL management.
It reminds me of the whistleblowing by Hank Roberts, ATL representative at the then Copland High School when he uncovered a fraud at the school.
It is unclear what action has been taken by the police but it is perhaps noteworthy that Mark Gallagher, Brent Borough Commander, is on the governing body (Corporation) of the College of North West London.
