The
Association of Employment and Learning Providersthinks so. With the Autumn Statement just days away,
AELPChief Executive Stewart Segal told Central Lobby of the dangers of some BIS proposals.
The proposed reforms could add complexity and cost without adding significant value – this could adversely affect future employer take-up of the programme.
Segal said ministers have regularly acknowledged that apprenticeships are a ‘success story’. There are a record 858,900 apprentices currently being trained and 73.8% of them complete their programme.
However for the first time in many years, 2012-13 saw an overall decrease in the number of people starting an apprenticeship with numbers falling noticeably in the 16 to 18 year old age group.
Plans to fund businesses for their apprenticeship training via the PAYE system will turn smaller companies off apprenticeships rather than bringing more employers on board, Segal said.
“Despite the fact HMRC are talking about simple payment rate, it is unlikely it will be simplified enough,” he explained.
“There will be different payments by sector, by age of learners, even by the location of learners.
“We want to move the system towards further employment engagement, not a new system with 200,000 to 300,000 employers involved in a new HRMC relationship.
“Funding through PAYE has been likened to some other elements of pay like maternity pay.
“But this is not related to payment but to a fee, it is more complex and harder to maintain. We think that the link to tax is not helpful.”
Segal added: “Many SMEs may not have payroll staff - many small businesses outsource their payroll. And the majority of apprentices are in a business where there are only one or two apprentices.”
Other plans to require employers to make upfront cash contributions to train all age groups could also have a damaging impact on the recruitment of 16 to 18 year old apprentices at a time when numbers are already falling.
Segal says employers already spend significant resources in employing and training them, and the reality of how SMEs actually operate seems to have been lost.
“There may be cash flow issues and a suspicion that the money will be difficult to get.
“Then there is the whole process of payment, of invoicing and negotiating with trainers. At the moment trainers can take that barrier away. We are not suggesting employers shouldn’t understand the cost.
“But training providers spend a lot of time reassuring employers to take on people with no experience. This proposal is just one more burden.”
Segal warned that the quality of apprenticeships may suffer without the key role that training providers play in ensuring that the apprentice’s learning experience is a positive and fruitful one.
AELPmembers engage with over 360,000 employers a year and they have played a key role in selling the merits of apprenticeships to employers, many of the SMEs.
A recent survey showed that 81% of employer responders did not favour government funding being moved away from providers.
A CBI/Pearson skills survey found that less than half of CBI members wanted more ownership over funding.
The Government has proposed that 30% of the cost be paid up front by employers. Segal points to the considerable ‘in-kind’ contributions which employers already make, such as wage costs, time off the job, on the job supervision and training, and provision of training facilities.
AELPrecommends that the current system of funding training providers and colleges for their delivery of apprenticeships on behalf of their employer customers should be retained with some reforms which we believe will result in more businesses taking on apprentices.
Last year
AELP’s 650 members helped 117,000 learners complete an apprenticeship.
Segal said: “For us it is a wider service - we not only make all of the effort to persuade businesses to take on young people, but provide services around HR, management once you are there as a training service you do a lot more than just manage the apprenticeships.”