Consultation on the Scottish Government response to the introduction of the UK Apprenticeship Levy

2. Modern Apprenticeships Growth Ambition

2.1. This section presents the findings relating to Question 1, which asked:

"Should the Government's commitment to 30,000 Modern Apprenticeships starts a year by 2020: a) be maintained or b) be increased?"

Overall pattern of views

2.2. Almost all of the respondents (95%) addressed Question 1. Of these, almost two thirds (63%) ticked ("a"), or expressed clear support for this option, to maintain the Scottish Government's commitment to 30,000 MA starts a year by 2020.

2.3. Just over a quarter (28%) ticked ("b") or expressed clear support for this option, to increase the commitment. The remainder of those who addressed the question (9%) did not express a clear preference, but made other comments.

2.4. There were few differences by category, with most following this pattern. The only variations were NHS respondents (among whom 90% stated that the level of commitment should be maintained), the third sector (where 74% stated it should be maintained) and trades union respondents (where only 29% stated that it should be maintained).

2.5. The full quantitative analysis of Question 1 is presented in tables A1 to A3 ( Annex 3).

Additional comments

2.6. More than four fifths (83%) of those who responded to Question 1 made additional comments. There were three main themes overall:

• The benefits of, or reasons for maintaining the current commitment.
• The benefits of, or reasons for increasing the current commitment.
• Suggestions about developments to apprenticeships in Scotland.

2.7. Many issues were raised within each overall theme, and these are summarised in the remainder of this section.

The benefits of, or reasons for maintaining the current commitment

2.8. Approaching two thirds of those who made additional comments suggested benefits of, or reasons for maintaining the current level of commitment. These related to the following broad areas:

• The nature of the current commitment.
• The quality of MAs.
• Capacity issues.
• Current experiences of MAs.
• The wider context for MAs.

The nature of the current commitment

2.9. Many of the reasons given to maintain, rather than increase, the level of commitment related to the nature of the current commitment. Some respondents, for example, described this level as being: realistic; appropriate; balanced; achievable and sufficient. Several also stated that it would (or should) be based on evidence of employer need and demand.

2.10. Several respondents expressed the view that the level is already ambitious or challenging (and two stated that it should be reduced). A few stated that it was unclear how it had been calculated, while one expressed the need to be sure that the current commitment will be met prior to any increase. Some stated that they were not aware of any evidence of additional demand, and a few gave examples of a lack of need for an increase from their own sector.

2.11. Several, however, stated that the current level of commitment should be seen as a minimum, and should not be decreased (with a few citing the importance of MAs, or the need for these in their own sector to support this view).

The quality of MAs

2.12. Several respondents expressed the view that maintaining the current level of commitment is the best way to ensure, and continue to develop the quality of MAs, to benefit both employers and apprentices.

2.13. Further comments included the view that the quality of MAs is more important than their quantity, and it is important to avoid a "tick box" or "numbers game" (which may, for example, ignore the importance of positive outcomes). A related concern, expressed by several respondents, was that increasing the level of commitment may compromise the quality of MAs, and devalue the training.

Capacity issues

2.14. A number of respondents expressed the view that a lack of capacity to support an increase in MAs was a further reason to maintain the current level. Comments were made about a perceived lack of capacity among employers (including, but not only smaller employers and those in some geographical areas or sectors) and a lack of capacity among some training providers.

2.15. A few respondents mentioned particular financial constraints, such as: reduced funding for MAs; financial insecurity or uncertainty; and pressure on resources. A small number mentioned staffing constraints ( e.g. a lack of staff to support or train an apprentice). A small number stated specifically that they would not be able to deliver sufficient numbers of MAs to recover their Levy contribution.

Current experiences of MAs

2.16. Respondents' experiences of current MAs were also mentioned among the reasons to maintain the current level of commitment (both in terms of neither increasing nor decreasing this).

2.17. Current concerns about MAs were cited as making an increase inappropriate and problems mentioned included: lack of flexibility, and restrictions on what could be funded; recent expansion of MAs and some duplication; lack of sufficient infrastructure and proven framework; and lack of coherence in the system. A small number of respondents stated generally that MAs did not always suit organisational needs (or that an increase in the level of commitment to these would not).

2.18. Positive experiences of current MAs were also cited to support maintaining the current level, making any decrease inappropriate.

The wider context for MAs

2.19. A number of issues relating to the wider context for MAs were also mentioned to support maintaining rather than increasing the current level of commitment. Several respondents, for example, mentioned the overall economic climate in Scotland, with decreasing budgets and uncertainty relating to the impact of the EU referendum result.

2.20. A few respondents mentioned the actual introduction of the Levy itself as a reason to maintain, rather than increase the current target. Some, for example, mentioned a need for a "settling-in" period and stability; or a current lack of understanding of how the Levy will operate in Scotland and impact on employers.

2.21. One respondent mentioned that population issues in their area would reduce the number of young people available for MAs.

The benefits of, or reasons for increasing the current commitment

2.22. A much smaller proportion of respondents mentioned benefits of, or reasons to increase this (just under a fifth of those who made additional comments). These were in four broad areas:

• The overall needs of employers.
• Gaps in current provision.
• The needs of the Scottish economy.
• Availability of levy funding.

The overall needs of employers

2.23. A very common theme among those who supported increasing the level of current commitment was that this would help to meet the needs of employers.

2.24. Several mentioned, for example, the overall value of MAs to both employers and apprentices, or described their own positive experiences of these. Several gave details of perceived unmet or increasing need for MAs in their own area or sector ( e.g. as a result of skills gaps and demographic changes). A small number mentioned that the level of commitment in Scotland was low compared to England.

2.25. Several respondents stated specifically that they would only support an increase in the level of commitment if there was evidence of employer demand.

Gaps in current provision

2.26. A further, related reason for supporting an increase in the level of commitment was the view that there were specific gaps in current provision. Among these, age-related gaps in MAs (particularly limitations to provision for those over aged 25+) were mentioned most frequently.

2.27. Small numbers of respondents mentioned other gaps in current MAs. For example, some respondents mentioned gaps by gender, and continuing occupational segregation. Others mentioned gaps in provision to: disadvantaged and excluded groups; less academic young people; BME people; disabled people; looked after children; and young carers. It was suggested that an increase in MAs (coupled with other changes) could help address such gaps.

2.28. Some also mentioned gaps, or scope for further provision in particular sectors, including, for example: engineering and construction; food and drink; childcare; health and social care; energy; public sector; retail; hospitality and tourism; transport; the third sector; and digital / IT.

The Scottish economy

2.29. A few respondents cited benefits to the Scottish economy overall from an increase in MAs. These included, for example: building a strong and diverse workforce to meet future demand; providing more opportunities to develop young people's skills; and helping address youth unemployment.

2.30. It was also suggested that an increase in the level of commitment would contribute to economic growth and to achievement of the ambitions of the Youth Employment Strategy and the Scottish Government's economic strategy.

Availability of Levy funding

2.31. Several respondents suggested that the actual availability of Levy funding was a reason to increase the level of commitment to MAs. Comments included that: current funding to MAs, in terms of the amount awarded per person, had decreased; the additional money from the Levy would lead to greater demand for apprenticeships; and the commitment should be increased to reflect the additional resources.

Suggestions about developments to apprenticeships in Scotland

2.32. Over half of those who made additional comments at Question 1 (including respondents with differing overall views) provided further suggestions about the development of apprenticeships.

2.33. The most common were suggestions about:

• The overall approach to apprenticeships.
• The nature and use of "targets".
• Developments in sectors and subject areas.
• Developments for specific groups.
• Other suggested developments.
• Funding issues.

2.34. It should be noted here that some of these overall themes were common to a number of questions, although the relative emphasis on issues within the themes may differ. As such, some will recur, with different emphases, in the presentation of findings for questions 2-5, and in overall comments at question 6.

The overall approach to apprenticeships

2.35. The most common suggestions about the overall approach to apprenticeships, whatever the level of commitment, were the need to ensure quality, and to ensure that the training provided (and the system) reflected employer needs and demand.

2.36. Smaller numbers of respondents suggested other requirements. Some mentioned the importance of an integrated approach, providing a clear pathway and taking account of other funding streams and pathways. Others mentioned a need for: flexibility (in the frameworks, delivery and funding arrangements); fairness and equality; clear objectives and outcomes; partnership working with employers and other stakeholders; and an approach that meets the needs of apprentices.

The nature and use of "targets"

2.37. A number of suggestions were also made about future targets. There was a common theme that any future commitment should be based on labour market and employer needs and demand, supported by evidence, consultation and review. It was also suggested that the level should take account of: skills gaps; supply and demand among young people; geographical issues; the needs of different sectors and groups; and the ability to deliver places.

2.38. Several respondents (most of whom felt the existing level of commitment should be maintained) stated that there should be potential to increase this in the future, if there is evidence of need and demand. One respondent stated that the target should be increased and brought forward to May 2018.

2.39. Some respondents made suggestions about the actual use of a "target" in the future. Some, for example, expressed concern about a negative impact of this ( e.g. on quality), and a small number stated that there should not be a numerical target. A few suggested that the focus should be upon MA completions, rather than starts. Some mixed views were also expressed about whether there should be a "headline" target, or whether this should be broken down by sector.

Developments in sectors and subject areas

2.40. Many respondents made suggestions about developments to MAs in sectors or subject areas. A frequent general suggestion was that, overall, the sectors covered by MAs should be widened. Other comments included that there could be additional "priority" sectors, further skills and subjects covered, and other training options available.

2.41. A few respondents stated that activity should focus on sectors of key importance or that those with evidence of skills gaps, or scope for future employment growth should be prioritised. A small number suggested expanding the number of MAs employed by SMEs.

2.42. A number of specific sectors and subject areas were suggested (by small numbers in each case) in which there was a need to provide or develop apprenticeships. These included those mentioned at para 2.28, as well as a number of others. Some also mentioned specific types of skills relating to their sector for development.

Developments for specific groups

2.43. Many respondents made suggestions about addressing the needs of specific groups. The most common issue raised was to expand MA opportunities for older people. Comments included that: the age bands should be extended; greater funding support should be provided for those aged 20+ (and specifically over 25); and the Levy funding should be used to support "all age" participation in MAs.

2.44. Suggestions were also made, by a small number of respondents in each case, about addressing gaps in provision for other groups ( e.g. by reserving a proportion of MAs for those furthest from the labour market, and meeting additional support needs of individuals and their employers). The groups mentioned reflected those highlighted in para 2.27.

Other suggested developments

2.45. Respondents mentioned a number of other potential developments to apprenticeships. Several, for example, suggested increasing MAs at specific levels (particularly higher levels, although some highlighted a need for a balance of levels).

2.46. Other suggestions, by smaller numbers of respondents, included to:

• Enable additional training providers to support and deliver apprenticeships.
• Ensure inspection and quality audit.
• Provide clearer definition of what an MA entails.
• Develop partnership arrangements ( e.g. through a "hub" or shared MAs).
• Use public procurement policies to encourage apprenticeships.
• Provide greater consistency across the UK.
• Promote MAs to employers and potential apprentices.
• Allow apprentices to access support for more than one apprenticeship.
• Ensure the advisory structure supports developments.

Funding issues

2.47. As well as these suggestions, many respondents stressed a need for sufficient funding for the developments. Several suggested specific costs for funding, including:

• Provide wage subsidies and incentives for apprenticeships.
• Consider the level of Government funding to the cost of an individual apprentice's training (with suggestions to: increase this; reduce employer contributions; ensure no further funding reductions; and review this).
• Improve wage levels for apprentices ( e.g. linking them to progression).
• Provide funding for specific aspects of the costs of apprenticeships (including, in the view of some respondents, all apprentice training costs).
• Ring-fence funding for specific purposes, or provide grants for specific developments relating to apprenticeships.

2.48. Comments were also made about the means of providing Levy funding, including, for example, to: return this to employers and sectors in a way that reflects their contributions; ensure flexibility in its uses; and ensure that it does not displace or replace existing funding, nor lead to employers "re-badging" existing training as apprenticeships.

2.49. Additional comments included the need to take account of the costs of provision in remote and rural areas, as well as higher delivery costs for other reasons. It was also suggested that the needs of non-Levy payers should be considered. A range of further cross-cutting suggestions were also made, which are discussed further in Section 7.

Other comments

2.50. Several respondents made other comments about the use of Levy funding to support other developments covered by Questions 2-5. These will be discussed in Sections 3-6.

2.51. Several provided detailed information about their organisation and role in MAs. A few commented on their potential role in taking developments to apprenticeships forward.

2.52. Comments were also made about the Levy itself, including its impact (positive and negative) and areas for further information and clarity. A few respondents commented on particular aspects of the consultation. These issues are discussed further in Section 7.