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

3. Graduate Level Apprenticeships

3.1. This section presents the findings relating to Question 2 which asked:

"Should Apprenticeship Levy funding support growth in the number of Graduate Level Apprenticeships in Scotland? a) Yes b) No"

Overall views

3.2. Almost all of the respondents (95%) addressed Question 2. Of these, more than three quarters (79%) either ticked "yes" or expressed clear support for the view that Apprenticeship Levy funding should support growth in the number of Graduate Level Apprenticeships ( GLAs) in Scotland.

3.3. Around a sixth (16%) either ticked "no" or expressed clear disagreement with the use of Levy funding for this purpose. The remainder of those who addressed the question (5%), did not express a clear preference, but made other comments.

3.4. By respondent type, there was substantial support across all categories of respondents for the view that funding should support growth in the number of GLAs. The strongest support was found among: local authorities (96%); trades unions (86%); the private sector (82%); and universities, colleges and the training sector (81%).

3.5. There was a small difference in responses to this question by respondents' overall views of the growth ambition for MAs (explored in Question 1). 82% of those who stated that the Government's current commitment should be maintained, compared with 74% of those who believed it should be increased, expressed agreement with Question 2.

3.6. The full quantitative analysis of Question 2 is presented in tables A4 to A7 ( Annex 3).

Additional comments

3.7. More than four fifths of those who responded to Question 2 (81%) made additional comments. There were three main themes overall:

• Benefits of, or reasons to use Levy funding to support growth in GLAs.
• Concerns about using Levy funding to support growth in GLAs.
• Suggestions about developments to GLAs.

3.8. Many issues were raised within these themes, and these are summarised below.

Benefits of, or reasons to use Levy funding to support growth in GLAs

3.9. Approaching two thirds of those who made additional comments suggested benefits of, or reasons for this. These related to the following broad areas:

• Meeting the needs of employers.
• Demand from specific sectors, or for specific skills.
• Meeting the needs of individual workers.
• Meeting the needs of specific groups.
• Wider issues and the Scottish context.

Meeting the needs of employers

3.10. The most common perceived benefit of using Levy funding for this purpose was that a growth in GLAs would help meet the needs of employers. While some respondents mentioned the general value of GLAs to employers, and an overall demand from employers, several stated that a growth in GLAs would help develop skills in their own workforce, or increase the range of higher or technical skills available to them as an employer.

3.11. GLAs were also seen to help match individuals and their skills to respondents' actual business requirements ( e.g. by helping address particular skill shortages, or to meet demand in specific growth areas). Some respondents stated that GLAs also enabled employers to "grow" their own talent internally. They were also seen to help make individuals with technical skills more "work-ready".

3.12. Several respondents indicated that GLAs could help create a pipeline of skilled staff, and would help with staff recruitment and retention. This was also seen to assist with workforce and succession planning. A small number of respondents suggested that GLAs may help businesses to be more productive and innovative.

3.13. A further point made by a small number of respondents was that employers could use GLAs to get a greater return for their Levy contribution. A few stated that a growth in GLAs (along with other changes) could help SMEs take these on, or open up the market for GLAs more generally. One respondent suggested that a growth in GLAs may provide opportunities to strengthen links between organisations and the academic sector.

Demand from specific sectors, or for specific skills

3.14. A further, closely related theme was that an increase in GLAs would help meet the needs of specific sectors, and enable them to grow. Among a number of sectors mentioned, the ones highlighted most commonly were: STEM; construction; Information and Communications Technology ( ICT) and digital; health and social care; creative; and energy. A small number of respondents also mentioned benefits to local authorities (in a range of skills areas).

3.15. It was suggested that GLAs would help these sectors to: address skill shortages and difficult to fill vacancies; combine academic and practical learning; develop additional skills for key roles (or particular types of skills, such as financial or management); meet registration or minimum qualification requirements; provide new entry routes to careers; and train technical and professional staff "in-house".

3.16. A small number of respondents (from different sectors) suggested that GLAs could enable skilled technical staff in their sector to gain management or higher level qualifications, or business qualifications. One respondent stated that this could help them to retrain skilled staff displaced by a downturn in the sector.

3.17. A small number of respondents indicated that a growth in GLAs may assist sectors where existing MAs or college-based qualifications are not at a high enough level to meet the sector's needs.

3.18. It was also suggested that a growth in the number of GLAs could extend the reach of MAs into sectors where they are less common or not provided ( e.g. finance; arts and culture; the church; some health and social care roles; and others). A few respondents stated that GLAs could be useful in sectors where university places may be limited.

Meeting the needs of individual workers and specific groups

3.19. Another common theme among the benefits of a growth in GLAs was that this would help meet the needs of individual workers, and specific groups.

3.20. A number of respondents stated that a growth in GLAs would give individuals more choice, and offer an alternative to traditional learning styles, particularly in technical or professional roles. It was also suggested that some individuals may perform better out of a purely academic environment.

3.21. Some respondents expressed the view that a growth in GLAs would give individuals a better pathway, and enable progression from an MA or craft or technician-based qualification. A number suggested that GLAs may make individuals more employable, and provide them with both vocational and academic skills. A small number of respondents stated that a GLA route would reduce or prevent individuals' student debt.

Meeting the needs of specific groups

3.22. Several respondents stated that a growth in GLAs could help tackle current under-representation among specific groups, as well as generally increasing opportunities and encouraging diversity and inclusion. Among particular groups mentioned (by small numbers in each case) were: disabled people; BME people; older people; women; and those who may not have had access to higher education.

Wider issues and the Scottish context

3.23. A small number of respondents identified wider benefits of a growth in GLAs. Some expressed general positive views of GLAs, while some stated that using the Levy funding in this way would benefit the Scottish economy as a whole ( e.g. making it more competitive; providing a more skilled workforce; and leading to fewer skills shortages). One respondent suggested that GLAs could also provide a means of helping the existing workforce to re-skill or up-skill (and would shift some of the focus away from labour market entrants alone).

3.24. A small number of respondents mentioned potential benefits for those providing education and training. One, for example, identified GLAs as a potential export opportunity. A small number made comparisons to what they considered to be positive developments elsewhere ( e.g. the increase in GLAs in England under the Trailblazer initiative).

3.25. Several respondents stated that a growth in GLAs was consistent with, and part of the overall policy approach in Scotland. A small number stated that it would help raise awareness and improve the status and perceptions of the apprenticeship programme.

Concerns about using Levy funding to support growth in GLAs

3.26. A much smaller proportion of respondents than identified benefits (around a fifth of those who made additional comments) identified concerns with this. These were in three broad areas:

• Lack of demand for, or benefit from growth.
• Issues with the use of funding.
• Wider negative impacts.

Lack of demand for, or benefit from growth

3.27. The most common concern about using Levy funding to support growth in the number of GLAs was the view that this was not needed, or would bring limited benefits.

3.28. Some respondents stated that there was little evidence of demand for this either from their own sector, or more generally. Examples of specific sectors where, in the respondent's view, there would be little demand included: hair and beauty; freight; retail; construction; property and cleaning; and building services engineering. Some stated that GLAs would not meet their needs either in terms of the skills needed or in the level of these.

3.29. Additional comments by some respondents included that:

• There were already enough graduate level places to meet their needs.
• They had no difficulty in recruiting graduates.
• They would be unable to sustain or support GLAs ( e.g. due to size or location).
• The posts for MAs in their organisation were not suitable for GLAs.
• Some organisations already ran independent graduate programmes.

3.30. Some respondents also believed that growth in GLAs would not address some key priorities ( e.g. issues faced by equalities and other under-represented groups; and specific skills shortages).

Issues with the use of funding

3.31. Several respondents raised concerns about the actual use of funding for growth in GLAs, with a number of different points raised (by small numbers in each case).

3.32. One was a view that there were (and should be) other ways of funding and providing graduate programmes ( e.g. through existing funding streams). A small number of respondents expressed concern about the Levy (rather than employers) meeting the costs of GLAs. There was also a concern that Levy funding could substitute for existing funding from the Scottish Funding Council ( SFC).

3.33. A few also stated that there were both alternative programmes available within the FE/ HE sectors, and run by large employers. One respondent suggested that the focus for funding should be on making existing degree level courses more practical and skills-based. Another stated that universities should be doing more to meet employers' needs. A few respondents expressed concern that large employers may re-brand existing graduate programmes to qualify for public subsidy.

3.34. A few respondents argued that the priority should be for the provision of non-graduate level MAs, or MAs for those with low skill levels or at risk from economic changes. A concern was also expressed that GLAs could drain resources from other MAs, or spread the Levy funding too thinly.

3.35. A small number of respondents suggested that it was unfair that some public sector organisations facing higher Levy contributions should subsidise GLAs in well-established organisations with more resources. It was also suggested that the Levy should be used to support those industries and employers paying it.

Wider negative impacts

3.36. A small number of respondents expressed concern about potential wider negative impacts of using Levy funding to support growth in GLAs.

3.37. A few stated, for example, that this may lead to a decline in the number of degree places available, or in the number of young people choosing such a route. One respondent suggested that an increased focus on GLAs could exclude more disabled people.

3.38. An additional concern was that increasing GLAs could, paradoxically, make it harder for graduates to get employment ( e.g. as the number of internships could decline, or some companies may choose to employ GLAs, with a public subsidy). One respondent suggested that a growth in GLAs could lead to depressed salaries for graduates.

Suggestions about developments to GLAs

3.39. Over half of those who made additional comments at Question 2 made suggestions about developments to these. The most common related to:

• The overall approach to GLAs.
• Developments for specific sectors or subject areas.
• Developments for specific groups.
• Other suggested developments.
• Funding issues.

The overall approach to GLAs

3.40. The largest number of suggestions about GLAs related to the overall approach to these. The most common were the need to ensure that GLAs: meet the needs of employers and the economy; and involve joint working between industry, FE/ HE and training providers.

3.41. Other requirements for GLAs, mentioned by smaller numbers, included a need for: a focus on quality and standards; flexibility ( e.g. in the model, funding, timescale and delivery); alignment to existing qualifications and employers' in-house programmes; and the promotion of fairness and equality.

Developments for specific sectors or subject areas

3.42. A number of respondents made comments about specific sectors or subject areas for development of GLAs. Several stated generally that the GLA model should be extended to a wider range of sectors than is currently the case. Some suggested targeting areas of strategic priority or skills shortages.

3.43. Some respondents highlighted a need to target their own or other specific sectors (with many suggestions made, including those highlighted at para 3.14 and others). A small number of respondents suggested targeting SMEs, or employers within a recognised supply chain.

3.44. One respondent suggested that Levy funding should be used to broaden the skills areas covered by GLAs. Specific suggestions included developing management and financial skills.

Developments for specific groups

3.45. Several respondents made comments about developments for specific groups, and the most common related to older people. A view expressed frequently was that GLAs should not be restricted to under-25s, or should be targeted at all ages (although one respondent stated that this should not be at the expense of 16-19 year olds).

3.46. Smaller numbers of respondents identified other groups for a specific focus in any development of GLAs. These included: disabled people; women; people from BME groups; people from disadvantaged areas; those furthest from the labour market; care leavers and looked after young people; young carers; and others who may not otherwise be able to access these opportunities. One respondent stated that GLAs should be available to existing employees.

Other suggested developments

3.47. A number of additional developments were suggested. A small number of respondents, for example, mentioned that they should be offered at a number of levels (including higher levels and masters/postgraduate) and that they should include work-based and off-the-job training. One respondent suggested having an allocation of GLAs for those finishing tertiary education.

3.48. Other suggested developments included to:

• Ensure fair pay for graduate level apprentices.
• Provide a clear career route.
• Review eligibility criteria and funding options.
• Involve in the design and delivery of GLAs: employers; industry and public sector bodies; trades unions; and higher education and skills providers.
• Develop an understanding of GLAs ( e.g. by mapping provision and gaps; secondment of academics to industry and vice versa; support to employers; awareness raising and information about GLAs; and evaluation).
• Provide a consistent approach to GLAs across the UK (although a few respondents also suggested that the scheme in Scotland should be distinctive).
• Provide clarity in terminology relating to GLAs.

Funding issues

3.49. As well as the above suggestions, a few respondents mentioned a general need for adequate funding to support developments. A small number mentioned particular GLA costs for funding ( e.g. wages; training; and assessment). A few suggested using Levy funding to contribute to existing graduate level training programmes or to support training schemes in sectors which will pay the Levy but do not provide apprenticeships. Several suggested that GLAs should not be developed at the expense of other MAs.

3.50. A small number of respondents made additional suggestions about funding arrangements. These included that funding for GLAs should be:

• Linked to evidence of need and evidence of a joint approach.
• Ratified by the Scottish Apprenticeship Advisory Board ( SAAB) Employer Engagement Group.
• Ring-fenced, with some allocated specifically to SMEs.
• Matched by funding from the SFC.
• Provided on a co-investment basis for non-Levy payers.

3.51. One respondent stated there should be one funding source for those operating across the UK.

Other comments

3.52. Some respondents made additional comments about the consultation or the Levy itself, which will be discussed in Section 7.

3.53. Several gave examples of how their organisation had been, or was involved in developing or providing GLAs, or suggested how they might be involved in this in the future.