Policy Submissions

S969 - Consultation of Funding Reform for Apprenticeships in England


The IET responded to the consultation issued by the Department for Business, Innovation and Skills, together with the Department for Education on the method by which apprenticeships in England could be funded.


Three models were put forward, firstly via the Direct Payment Model a business would register their apprentice and directly pay training providers for their education, which would later be reimbursed in part by the government. Secondly the PAYE model would establish the same method but employers would be reimbursed via their PAYE account. Finally both the government and employer would pay directly to the training provider; however payment from the government can only be claimed once the business has done so.

The IET is concerned that all three models could detrimentally effect small businesses, apprentices and the industry as a whole. An increase in administration may cause a disproportionate burden on small businesses, who may be deterred from taking on apprentices. The IET is concerned that the number of apprentices may be reduced if the burden on employers is increased too greatly.

Negotiation between businesses and training providers could lead to companies negotiating down the cost, thereby risking quality and favour larger companies. Despite it being beneficial for businesses to co-invest in apprenticeships in order to provide the right training, it could lead to specialisation of skills which reduces flexibility in the workforce. It is important that the needs of apprentices themselves are considered as a broad skill base is required before specialisation occurs. This would allow apprentices to move freely within industry, thereby benefiting the supply chain.

Submission Details Submitted on 01 October 2013 to Department for Business, Innovation and Skills

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Keywords and Search Terms Key words for the Apprenticeship Consultation : Apprentice, Small Business, Training Provider, Payment Model, Industry, Employer