Skills for Jobs: What Does It Mean? Part I

By Matthew Greenwood

It’s finally here, the Government’s long-awaited white paper on the future of higher education. So, what’s actually in it? In this series of PPRG Insight pieces, we’re going to dive into the paper and help you to get to grips with what the Government’s planning.

The first part of the Government’s plan is to try and synthesise the needs of businesses with the training that colleges output. As they understand things, it is currently the case that too many people come out of colleges with skills, just not the skills they need. This, according to the Department for Education, is because employers do not have enough influence over the skills provision on offer and that leads to a disconnect where the current plethora of courses on offer don’t fit the market they’re supposed to be fuelling.

That is why the Government has decided to create what they’re calling ‘Local Skills Improvement Plans.’ These plans will require employers to articulate and prove their skills needs so that education providers to adjust their output accordingly, and to get the ball rolling, the Government intends to announce a series of ‘Trailblazer’ local areas in early 2021 that will show the rest of us how these Plans will look like

That’s step one. To ensure that these action plans don’t fall off the printer and into the recycling bin, the Government has decided to give it financial backing. Resultantly, they’ve also pledged to introduce funds in 2021/22 to allow the aforementioned pilot areas to support colleges reshape their courses and facilities in order to fulfil the requirements of the new Local Skills Improvement Plans. Finally, to ensure that everyone is on the same page, there are plans to align the vast majority of post-16 technical and higher technical qualifications to employer-led standards set by the Institute for Apprenticeships and Technical Education. This way, employers will know what they're getting when they hire an apprentice. In turn, an apprentice will also know that they will be learning the skills they need to move into future employment.

Secondly, the Government has been listening to small businesses and has pledged to support them. To combat the decline in the number of small employers taking on apprentices, the Government is making £2.5 billion available to support apprenticeships, including for employers who do not pay the apprenticeship levy. This means that companies that do not have their own apprenticeship skills accounts because they do not pay the levy will be able will claim more money to support apprenticeships in addition to the money they already receive.

A bigger innovation, the Government is making changes to how big companies interact with the apprenticeship levy. Currently, a large company pays the apprenticeship levy and receives apprenticeship vouchers which it is then able to use, but these vouchers are time-limited for a period of 24 months after which they are reclaimed by HMRC. To combat the ‘waste’ of levy funds, the Government will allow companies to levy-paying employers to pledge specific amounts of their funds as available for transfer to support smaller firms in their locality.

Finally, the White Paper offers some support to the construction and creative sectors, which often suffer from ad hoc employment patterns. Sectorial apprenticeship agencies will support apprentices in this area move between companies to complete their apprenticeship to meet the apprenticeship’s’ time requirements.

That’s it for part one. Staying true to its market-based principles, the Government’s paper has set out a process that will give businesses more control in setting the terms for future apprenticeships. The hope is that this will create a process that is more attuned to the needs of businesses and thus warrant their active participation in the scheme.

However, there are also some other clear indicators in this section. By allowing large firms to make parts of their Levy available for transfer, the Government is indicating that it expects nimble, small businesses to pull much of the weight in delivering the skills the nation needs. There is some merit to this. By their nature, small businesses can spend a greater amount of time supporting an individual apprentice and introduce them to the inner workings of their firm, but this approach also has its drawbacks. Firstly, it somewhat absolves levy-paying firms of actually doing the work themselves. Rather it lets them foot the bill and get on with their day-to-day operations. Secondly, while small firms may have the opportunity to train people, they may refuse to do so if their hard work lacks transience because the apprentice quickly moves on post-training. It seems, then, that while the Government’s innovations may be welcome, they may need some chewing over.