Employers in England have spent as much as £2bn in the past six years on generic management apprenticeships, which largely benefit existing staff at the expense of younger people most in need of on-the-job training, according to the body representing HR professionals.
This diversion of public money to fund the career development of well-qualified staff and executives underlines the failures of the apprenticeship levy system and the need for its reform, the Chartered Institute of Personnel and Development argued on Monday.
Since 2017, when the levy system was introduced, the number of people starting just four popular management apprenticeships has grown more than tenfold, with about 26,000 enrolled on them in the last academic year of 2021-22.
During the same six year period, overall apprenticeship starts fell by more than a third, with the biggest decline among school leavers.
The Chartered Management Institute, which created some of the courses concerned, have argued that they can play a key role in helping older workers to retrain and plugging the UK’s deficit in management skills — often cited as a root cause of the country’s dismal record on productivity.
But critics of the levy system say it gives employers a strong incentive to spend money quickly on upskilling existing employees — often by rebadging training they would have done anyway as an apprenticeship — rather than recruiting younger people on to cheaper courses.
The levy requires employers whose annual wage bills exceed £3mn to pay in funds equivalent to 0.5 per cent of salary costs. Employers use the levy to cover the costs of training by approved providers, but must hand the money over to the Treasury if they fail to use it within two years.
A generic team leader qualification, which attracts levy funding of up to £4,500, is now by far the most popular apprenticeship in England.
Other popular courses include a “senior leader” apprenticeship with a funding cap of £14,000; a qualification for operations or departmental managers funded at up to £7,000; and a chartered manager degree that can attract as much as £22,000 of public money.
The CIPD said that almost all apprenticeships are in practice agreed at the top of the funding cap. It estimated that employers have spent a cumulative £2bn on these courses alone, even before taking into account other sector specific management qualifications.
“This is not an efficient way to train your managers,” said Lizzie Crowley, policy adviser at the CIPD, noting that shorter courses leading to very similar qualifications were available at much lower cost, without the need to take managers off the job for one day a week as the apprenticeship system dictates.