This week marks a revolutionary change in the way further education is funded. Last Thursday, the Apprenticeship Levy came into force.
New money into the system but old money out
The apprenticeship levy applies to the largest 2% of UK employers: those with an annual wage bill of over £3 million, who will now pay a tax of half of one percent of their salary spend to fund apprenticeship courses. By harnessing the funding power of corporate giants, and channelling learners towards an apprenticeship route, the government has sought to change the structure of vocational and adult education to a self-sustaining funding model.
The Chancellor announced in Spring Budget that Apprenticeship Providers from colleges, UTCs and third sector providers can expect to see an additional £500 million over the next five years, representing an increase in teaching hours from 600 to 900 for students.
Skills courses sculpted by the future employers
In exchange, these large employers will form the working group for setting out the standards for apprenticeships in order to guarantee that the skills taught are the skills that are needed in industry. Apprenticeships and Skills Minister Robert Halfon commented: “Our reforms to apprenticeships are all about quality, quality, quality. We do not just want 3 million apprenticeships by 2020, we want 3 million quality apprenticeships.”
The apprenticeship levy is the government's solution to further education funding and nearly all general FE colleges offer apprenticeships to over 300,000 apprentices nationally, currently.
Is everyone a winner?
Other adult training routes have been minimised to compensate: the Skill’s Funding Agency’s 11% funding cuts over the last two years have been directly mirrored by an 11% reduced uptake in Maths and English qualifications. This could indicate a worrying trend of literacy and numeracy skills becoming less accessible to the most vulnerable.
Whilst this move is a significant effort to solve the UK skills gap, the government now will have to take advice from Further Education leaders to ensure that other learners do not fall through the gaps.