Teacher training

Treasury plans apprenticeship levy funding restrictions

Move could affect viability of teaching apprenticeships

Move could affect viability of teaching apprenticeships

16 Nov 2023, 22:01

More from this author

Chancellor Jeremy Hunt
Exclusive

The chancellor has drawn up plans to restrict the use of levy funding for degree-level apprenticeships, prompting warnings about the viability of schemes for public sector workers like teachers.

Multiple sources said Jeremy Hunt was concerned about the affordability of the levy. It comes amid a huge rise in the number of costly level 6 and 7 apprenticeships handed to older employees while spending on lower levels and young people falls.

Officials have now floated the idea of limiting the use of levy cash on higher apprenticeships, but the Department for Education is understood to be resisting ahead of next week’s autumn statement.

Proposals include removing some apprenticeships – like the popular but controversial level 7 senior leader standard – from the scope of levy funding, introducing age restrictions, and demanding larger employer contributions.

Networks of training providers and universities contacted the Treasury this week to plead with the chancellor to not cut access to the courses, claiming the move is “political posturing” to appeal to certain parts of the electorate.

The Chartered Management Institute has also warned the majority of level 6 and 7 management apprentices are in public services and “critical for the productivity agenda and fiscal sustainability”.

Teaching apprenticeship at risk

Restricting funding for degree-level apprenticeships would jeopardise plans for an undergraduate teaching apprenticeship, which are being drawn up under Gillian Keegan’s leadership.

Ministers have come under increasing pressure to create a route for non-graduates since the creation of the levy, which must be paid by all employers with a pay bill of over £3 million, including schools, trusts and councils.

Given so much of schools’ spending is on teachers, the lack of an undergraduate route leaves limited options for leaders to spend their levy.

Since the levy was introduced, spending on level 6 and 7 apprenticeships had risen from £44 million in 2017-18 to £506 million in 2021-22. It now accounts for over a fifth of England’s annual apprenticeship budget.

Spending on level 2 apprenticeships dropped by a third over that period, from £622 million to £421 million.

The second most popular degree-level apprenticeship is the level 7 senior leader standard, which has had 25,200 starts in total since 2017-18.

In 2020, it emerged that school leaders were taking advantage of the so-called MBA apprenticeship.

The National College of Education, which offers programmes for those working in schools, had the highest number of people starting the course out of all training providers in the first quarter of 2019-20.

Increase apprenticeship budget instead, say experts

However, starts for this particular apprenticeship have started to drop nationally since the government removed its controversial MBA component from the scope of levy funding. Starts fell almost 40 per cent from 8,050 in 2020-21 to 4,880 in 2021-22.

Business schools and universities can continue to offer the MBA as an optional extra, but the cost of it must be funded by their employer.

Experts have called on the government to increase the apprenticeships budget in line with the level of levy receipts the tax brings in.

The government was accused of short-changing employers in September after analysis by sister title FE Week found the Treasury failed to distribute around £415 million paid into the levy by employers in the 2022-23 financial year.

Robert Halfon
Robert Halfon

Ciaran Roche, public affairs manager at the Association of Employment and Learning Providers, said he understood the government wanted more levy funds spent on level 2 to 5 courses.

But the “best way to do this would be to increase the apprenticeship programme budget to match the increased apprenticeship levy take”.

Skills minister Robert Halfon batted away concerns about the affordability of the budget earlier this year in an interview with FE Week, insisting that there were no talks about imposing controls on levy spending.

Levy spending on those aged 25 and over more than doubled between 2017-18 and 2021-22, growing from £460 million to £934 million.

At the same time spending on apprenticeships for young people aged 16 to 19 fell by £60 million, or a tenth, from £686 million to £626 million.

A final decision on whether to restrict levy funding for degree-level apprenticeships could come as soon as next week, it is understood.

The DfE and Treasury declined to comment.

Latest education roles from

IT Technician

IT Technician

Harris Academy Morden

Teacher of Geography

Teacher of Geography

Harris Academy Orpington

Lecturer/Assessor in Electrical

Lecturer/Assessor in Electrical

South Gloucestershire and Stroud College

Director of Management Information Systems (MIS)

Director of Management Information Systems (MIS)

South Gloucestershire and Stroud College

Exams Assistant

Exams Assistant

Richmond and Hillcroft Adult & Community College

Lecturer Electrical Installation

Lecturer Electrical Installation

Solihull College and University Centre

Sponsored posts

Sponsored post

It’s Education’s Time to Shine: Celebrate your Education Community in 2025!

The deadline is approaching to nominate a colleague, team, whole school or college for the 2025 Pearson National Teaching...

SWAdvertorial
Sponsored post

Navigating NPQ Funding Cuts: An Apprenticeship Success Story

Last year’s NPQ funding cuts meant that half of England’s teachers faced costs of up to £4,000 to complete...

SWAdvertorial
Sponsored post

Embedding Formative Assessment: not just a box-ticking exercise but something long-term and meaningful for all

Our EFA programme has been proven to help schools achieve better GCSE results, as evidenced by the EEF. Find...

SWAdvertorial
Sponsored post

Building capacity in family support to tackle low school attendance 

Persistent and severe school absence impacts children, families, and communities—especially in disadvantaged areas. School-Home Support’s Attendance Support and Development Programme...

SWAdvertorial

More from this theme

Teacher training

New academy CEO development programme under review

But current cohorts that started last February and September will not be affected

Freddie Whittaker
Teacher training

Shortening apprenticeships will give teacher training ‘flexibility’

DfE plans to change minimum apprenticeship course length to eight months, which could align teaching courses with other routes

Freddie Whittaker
Teacher training

ECF and NPQ review: What you need to know

The government is planning a series of changes to the early career framework, and a full review in 2027

Lydia Chantler-Hicks
Teacher training

DfE: New teacher training providers could get future accreditation ‘opportunities’

Clarification comes after bruising re-accreditation process saw 68 existing providers lose out

Lucas Cumiskey

Your thoughts

Leave a Reply

Your email address will not be published. Required fields are marked *