The UK’s education minister has ordered a review of the use of apprenticeship funding to enable senior executives to gain MBAs in a move that could spell the end of the contentious practice.
Management apprenticeships have become highly popular since the government reformed workplace training funding by making employers with annual payrolls greater than £3m set aside an equivalent to 0.5 per cent as an apprenticeship levy.
“I am absolutely determined to make sure levy funds are being used to support the people that can benefit most from an apprenticeship,” Gavin Williamson wrote in a letter calling for a review to Jennifer Coupland, chief executive of the Institute for Apprenticeships and Technical Education (Ifate), the body responsible for agreeing training standards.
He said he was committed to an employer-led system, but was not convinced that the levy should be used to pay for often highly qualified and highly paid staff to receive an MBA. “I’d rather see funding helping to kick-start careers or level up skills and opportunities,” he said.
The apprenticeship levy has courted controversy since it was launched in April 2017, when new apprenticeship starts plunged. The number of new apprenticeships created in the first 12 months of the levy’s operation was 26 per cent fewer than during the same period in 2015-16.
Large companies have spent the money on apprenticeships that might otherwise come from a regular training budget because they do not want to lose their levy contributions. Levy rules say any money unspent after two years is taken by the tax authority.
About 12.8 per cent of apprenticeship starts in 2017-18 were at foundation degree level or higher, compared with 5.3 per cent in 2015-16, according to a report by the National Audit Office the government spending watchdog.
“I’d rather see funding helping to kick-start careers or level up skills and opportunities,” Mr Williamson said in a statement accompanying his letter to the institute. “That’s why I’ve asked for a review of the senior leader apprenticeship standard to ensure it is meeting its aims.”
The Chartered Association of Business Schools (Cabs), which represents 120 MBA providers in the UK, claimed that employers were choosing to spend their levy money on MBA qualifications because it addressed the most pressing skills shortages they faced.
“We know from the CBI and the Federation of Small Businesses that one of the greatest hindrances to productivity in the UK is the lack of management skills,” Anne Kiem, Cabs chief executive, said. “If the levy fund is encouraging some of those employers to get the skills they need I see no reason why they shouldn’t be supported.”