Government quietly backtracks on 'devastating' cuts to inner-city apprenticeships

The Government has backtracked on cuts to apprenticeship funding after warnings they would have a “devastating” effect on working class youngsters in deprived, mostly inner-city areas.

The plans, originally snuck out during Parliament’s summer recess, would have seen the Skills Funding Agency (SFA)’s apprenticeship budget for 16 and 18 year olds slashed by 30 per cent – with even sharper cuts falling in deprived areas.

Industry bodies warned that an “apprenticeship desert” would open up in some disadvantaged inner-city areas were the changes to go ahead, while an analysis by the sector magazine FE Week suggested some of the most popular apprenticeships like construction would be heaviest hit.

The cuts were announced around the same time as Theresa May upped her rhetoric in favour of social mobility – promising to turn Britain into a “great meritocracy”.

The planned cuts, which would have taken effect from May next year, however prompted 55 MPs representing mostly inner-city deprived areas to accuse the Government of “a direct attack on social mobility”.

After campaigning by the further education sector and its supporters in Parliament, the cuts appear to have been reversed, however.

Today in a written statement the Education Secretary Justine Greening however said the Government would introduce an additional 20 per cent payment for the training of 16-18 year olds and retain a separate support system that boosts funding in disadvantaged areas.

FE sector sources say the latest announcement effectively reverses the worst effects of the cuts – which have received no parliamentary scrutiny thus far. Multiple sources have confirmed that an announcement was widely expected on Monday – it was ultimately delayed until Tuesday, with the Heathrow expansion announcement dominating the news agenda.

The funding changes came alongside the introduction of a new apprenticeship levy for larger businesses with an annual pay bill of over £3m.

Tottenham MP David Lammy, who organised September’s critical letter and is organising a debate in Parliament on the issue, accused the Government of damaging the life chances of working class kids.

“It is nothing short of a disgrace that the Government published their original cuts of up to 50 per cent during summer recess, without any parliamentary scrutiny or even a formal statement,” the former Labour skills minister said.

“Today’s U-turn shows that the Government has begun to listen to the further education sector and to the strong opposition from the Labour Party, particularly when it comes to protecting funding for 16-18 year olds and young people from disadvantaged backgrounds.

“Apprenticeships have always been seen as the poor relation of higher education, but if this Government is serious about social mobility they must stop damaging the life chances of working class kids by slashing support for apprenticeships and skills training.”

Gordon Marsden, Labour’s Shadow Minister for Apprenticeships, described the policy change as "major U-Turn".

‘It is a credit to the new Minister that he recognised that this needs to be done preserve any credibility for the Government’s social mobility position. We need to see the detail though and whether a year of transitional funding for disadvantaged areas will be enough," he said.

"There still remain big question marks over the Government’s apprenticeship targets and policies. We will continue pressing them strongly for urgent answers on the digital service, the Institute for Apprenticeships, resources and capacity."

The Education Secretary’s statement said: “The new apprenticeship levy, which we are introducing in April 2017, will put the funding of apprenticeships on a sustainable long-term footing so we can support opportunities for all. The levy will be set at 0.5 per cent of pay bill and only employers with a pay bill of more than £3 million will have to pay the levy. Employers that are not eligible to pay the levy will continue to receive government support towards the costs of apprenticeship training and assessment.

“The levy applies to all UK employers but apprenticeship funding policy is devolved. It is for the Devolved Administrations to decide how they use their levy income. This statement sets out how we will fund apprenticeships in England to help build an economy that works for everyone.

“To do that we are not only introducing the levy but also reforming the way we fund apprenticeships, introducing a dedicated register of approved apprenticeship training providers and launching the employer-led Institute for Apprenticeships. These changes will ensure apprenticeships are high quality, meet the needs of employers and provide opportunities for millions more people.

“After extensive discussions with employers and training providers we are today publishing the final funding policy for May 2017 onwards and details of the new register of apprenticeship training providers. The adjustments we have made to the funding policy since our proposals in August will help ensure that the reforms benefit more employers, providers and apprentices.”

A Department for Education spokesperson said: "This is far from a u-turn - it's exactly how good policy should be developed. We said back in August that we would listen hard to feedback on the apprenticeship levy proposals and that is exactly what we have done.

"What's important is that we now have a system which means anyone who wants it gets the opportunity to learn the skills they need to get the job they want. Apprenticeships are essential in a Britain that works for everyone which is why we will continue to work with employers and others to make sure we have a system that works for everyone."