News | Published December 06 2019

Apprenticeship levy tender process a hindrance for training providers like Riverside Training (Spalding) Ltd

The issue of the apprenticeship levy and its reform has returned to British headlines recently after the Confederation of British Industry called on the government not to enforce restrictions on how levy funds are spent.

According to the 2019 CBI and Pearson Education and Skills Annual Report, proposed restrictions on the age of apprentices, income and the level of training, which may be introduced into the levy, would make 78 per cent of 208 businesses and trade associations that were surveyed either ‘dissatisfied’ or ‘very dissatisfied’.

The CBI report said: “Restrictions on how levy funds can be used could be counter-productive to addressing some of the biggest skills challenges employers face.

“These include new technology, such as automation and AI in the workplace, which means that retraining and upskilling is more important than ever.”

Potential restrictions to the levy have been suggested after the Institute for Apprenticeships and Technical Education predicted that the levy could exceed budget by around £1.5 billion by 2021-22. Indeed, the National Audit Office has already reported that the average cost of training an apprentice is now double initial government predictions.

The CBI say that the increase of higher-level training programmes is responsible, since they are more time-consuming and much more costly to provide.

However, the lobby group has suggested that rather than simply impose restrictions such as excluding higher level course tiers from the levy, the government should instead focus on developing a ‘sustainable financial plan for the apprenticeship budget’ which will enable firms to continue to use levy funds to educate apprentices ‘of all ages and levels’.

52 per cent of employers surveyed in the report said that sparing time for their employees to undertake training had become a hindrance after the Department for Education and Ofsted had discouraged off-the-job training.

The CBI has called for consultation on amending the levy into a ‘flexible skills levy’. Addressing this proposal, education secretary Gavin Williamson said in an interview with FE Week that discussions to ensure the levy is both adequately funded and tailors to industry requirements would be a ‘critical’ part of the next spending review.

However, for some of those in the industry looking to access the levy, the tender process to get onto the scheme is another point in need of scrutiny that the government should examine.

Riverside Training (Spalding) Ltd, a specialist training provider in Lincolnshire, tendered to become a main provider of the apprenticeship levy after it was announced, meaning that they would deliver apprenticeship training for employers with a total wage bill exceeding £3 million, who are required to pay a 0.5 per cent levy into the programme to fund training.

However, founder and director Suzie Bulbeck described the tender process for the £650 million apprenticeship funding allocation as ‘beyond frustrating’.

Speaking to The Parliamentary Review, Bulbeck said: “The tender process for a slice of the mammoth £650 million apprenticeship funding allocation, however, was beyond frustrating. This was necessary if we were to work with non-levy employers – those with an annual wage bill of less than £3 million whose apprenticeships are jointly funded by themselves and the government under co-investment.”

One of the biggest issues in Bulbeck’s perspective was that the tender process required cumbersome paperwork to be completed which proved hugely time-consuming for members of staff, which in light of the long delay in announcing the tender result meant that planning for the future became a challenge, especially so when the application verdict was eventually delivered.

Bulbeck explained: “The process tied up many, many staff hours in time-consuming and complex form-filling. The extended delay in announcing the tender result meant that we were unable to operate day to day with confidence – let alone plan for the future.

“Eventually, we were told that our application had been unsuccessful. This outcome was both unexpected and potentially disastrous”.

For Bulbeck to ensure that the business was able to compensate for lost income and continue trading, Riverside Training was forced to change its business strategy. The firm also sourced levy-paying employers and then tendered to be included on their Approved Apprenticeship Training Provider List, allowing them to tender for individual apprenticeships. Riverside were then successful in securing inclusion on the list held by the Diocese of Norwich Education and Academies Trust, to provide further scope for apprenticeship provision. Yet, the reason why this action was necessary only serves to highlight further shortcomings in the apprenticeship levy itself.

Opinions in British industry differ on what should be done concerning the place of higher level courses within the levy, while the next government will also need to weigh up how to ensure the scheme is properly funded, however, the tender process will be another issue to review should even a revamped levy scheme become more easily accessible to those looking to provide high-quality training and not potentially hamstring them in the future.

For a scheme that already has its problems and seemingly has made multiple industry leaders keen for reform, further lessons can certainly be learned from the experience of Riverside Training to ensure that the tender process is not an aspect that will be overlooked and allowed to continually hinder industry. Whether or not this issue is addressed by government will become clearer in time.

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Authored by

Scott Challinor
Business Editor
December 06 2019

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