In a potentially radical shake-up to the apprenticeship system, construction employers are being asked by government if they wish to receive direct funding to purchase training for young people.
The proposal, which was laid out in the Richards Review last year, was announced this week by business secretary Vince Cable and is now out for a further round of consultation ending on October 1.
Mr Cable said giving employers freedom to choose the training that it most relevant to the needs of apprentices “will put businesses in the driving seat”.
The CITB issued a guarded response, saying: “We will consider all the proposals in the consultation document carefully. We will consult extensively to ensure an accurate and informed view from across the sector. We strongly believe that in providing employers with freedom and choice, that they are not overburdened by bureaucracy.”
In its first response to the Richards Review submitted in May, CITB stressed that any reform to the current funding model for apprentices must work for the wider industry – taking into account the scope and diversity of construction employers – and not implement a broad brush approach that fails to take into account employer size/resource/capacity to deliver apprenticeship training.
In consulting with the industry, CITB found that the majority of construction employers, particularly in the SME sector, reported that they have neither the time nor the appetite to become involved in the assessment or more extensive administration (financial) of training apprentices – and there was further feedback that while larger companies may have these resources, the SME community (which takes on the largest number of apprentices – 70%) does not. It also found that 79% of SME employers said any change would deter them from recruiting apprentices.
Three options are being presented:
Direct Payment Model: Businesses register apprentices and report claims for government funding through a new online system. Government funding is then paid directly into their bank account.
PAYE Payment Model: Businesses register apprentices through a new online system. They then recover government funding through their PAYE return.
Provider Payment Model: Government funding continues to be paid to training providers, but they can only draw it down when they have received the employer’s financial contribution towards training.
Construction employers were mulling over the details of the proposals and still considering the implications when CM spoke to them today.
Seddon director Nicola Hodkinson told CM: “It’s clear the current college training system for apprentices is not fit for purpose, but I’d be concerned if any of the proposed changes were unhelpful to the CITB. We’ve also got to be careful that direct funding is not something that benefits just the larger contractors, who take the money but then push the training requirement down to their supply chain. Any change has to be aimed at helping the smaller construction firms.”
Construction Youth Trust Executive Director Christine Townley said she has not studied the proposals in depth yet but would welcome any moves which improved colleges’ relationship with the industry.
Even if the outcome of the consultation leads to a shake-up in apprenticeship training, the CITB’s existence as an industry training body and sector skills council is not under threat. Its existence depends on consensus across the sector – and the latest stakeholder consensus shows 62% of employers support the continuation of the levy and grant system and 55% of industry employers believe that levels of training within the industry would worsen if CITB did not exist.
Image credit: <a href=’http://www.123rf.com/photo_12556726_young-people-in-professional-training-on-industrial-site.html’>goodluz / 123RF Stock Photo</a>
