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Apprentice reform heads into long grass

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The government has failed to reach any conclusions on its plans to reform apprenticeship funding.

Minister for skills and equality Nick Boles said today that more time was needed to work out how the reforms can be made to work.

“We need to take the time to get them right, ensuring administrative burdens can be kept to a minimum,” he said.

The government published a consultation document in March 2014, The Future of Apprenticeships in England: Funding Reform Technical Consultation, seeking feedback on implementation of the principles underpinning the new funding model. Italso consulted on two mechanisms for directing payments to employers: the PAYE system, which would deduct the government contribution from an employer’s PAYE payment; and an apprenticeship credit model, which would automatically top up an employer’s payment with the government contribution.

There were nearly 1500 responses but little consensus. Small businesses were coincerned about the implied bureaucracy.

“I understand the apprehension from many employers, especially small businesses, about any potential administrative burdens or negative impact on cash flow,” Mr Boles said. “In the context of the government’s ambitions to grow and improve the programme, I will not introduce bureaucracy that will make it more difficult for employers to offer apprenticeships.”

He added: “Giving employers direct control of apprenticeship funding remains a core and non-negotiable part of our reforms. It is central to driving the right behaviour in the system. However, based on the feedback to the consultation, we have concluded that further detailed design work is needed before we can reach a final decision on which funding mechanism will be taken forward to meet our shared aim of more high quality apprenticeships, where employers hold the purchasing power. We will continue to undertake this further work with you, in an open and collaborative way.”

The Federation of Master Builders (FMB) said that the government’s inability to demonstrate effective leadership put the entire future of the construction industry in the balance.

FMB chief executive Brian Berry said: “Today’s announcement by the skills minister offers no clarity or reassurance regarding the future of apprenticeship funding. Despite the business community – across many sectors – repeatedly warning government of the potential impact of their proposed reforms on the desire and ability of SMEs to train apprentices, we have been told that giving employers direct control of apprenticeship funding remains a non-negotiable part of the reforms.”

Mr Berry continued: “We have waited eight months for the government response to their spring 2014 consultation and have today been presented with two sides of A4 which only serve to fuel our fears about the ability of SME construction firms to train apprentices. If SME firms – particularly micro-firms – are asked to pay for apprenticeship training up front it will have a negative impact on cash flow and increase levels of bureaucracy no matter how simple the system is.”

Mr Berry concluded: “I urge government to think again and not to undermine the construction recovery which is tentatively moving in the right direction but could easily be set off course if we don’t have enough new skilled workers entering the industry. Indeed the Construction Industry Training Board (CITB) predicts that 200,000 new roles will be created in our sector over the next five years and a key way to fill these roles will be via apprenticeships. To experiment with apprenticeship training at such a time and against the advice of large swathes of the business community is irresponsible and foolish.”

 

The Construction Index UK News

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