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Government U-turns on crackdown to stop repeat of £100m apprenticeship rip-off


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The federal government has backtracked on its pledge to crack down on using taxpayers’ cash to fund college programs for high-flyers incomes six-figure salaries, regardless of the minister in cost beforehand describing it as “gaming the system”.

Final month, Robert Halfon, the minister for expertise and apprenticeships, promised to “take acceptable motion if there’s proof that the levy is being spent on ineligible programs, resembling to fund an MBA”.

His vow adopted an investigation by The Impartial into misuse of the apprenticeship levy, which revealed that £1bn of public cash had been used to fund masters programs, with £100m of that going particularly to part-fund MBAs, between 2017 and 2022.

However in follow-up emails, the Division for Training carried out a pointy U-turn, saying that the levy can be utilized to part-fund MBAs “due to overlap with the senior chief apprentice customary”, and stating that there can be no additional investigation.

Now, The Impartial can reveal that in 2020, when Mr Halfon was chair of the training choose committee, he referred to as on the apprenticeships minister on the time, Michelle Donelan, to place a cease to the “gaming of the levy system” that he stated had led to “greater than £100 million of apprenticeship levy funds [being] spent on masters levels for managers”.

The Hansard report of the Home of Commons debate on the levy on 11 February 2020 reveals that Mr Halfon stated: “Sadly, there was gaming of the levy system. The Occasions Academic Complement has printed a report at this time saying that greater than £100 million of apprenticeship levy funds have been spent on masters levels for managers … We have to reform the apprenticeship levy in order that funds are used extra productively.”

Mr Halfon later repeated the accusation and made clear the dividing line between what he thought was an affordable use of the levy and what was past the pale.

He stated: “We additionally have to do extra to make sure that the deprived have entry to diploma apprenticeships … I’m not speaking concerning the gaming of the system for grasp’s levels, however diploma apprenticeships in legislation and engineering.”

Since that point, the quantity spent on funding grasp’s levels, a apply that was condemned by Mr Halfon, has exploded tenfold, from £100m to £1bn.

Requested why he now appeared content material to permit it to proceed and for that determine to have spiralled on his watch, Mr Halfon declined to reply.

The Division for Training reiterated its earlier response, saying: “The senior chief apprenticeship now not consists of an MBA qualification and hasn’t since 2021. The senior chief apprenticeship solely consists of content material deemed important by employers and the impartial physique accountable for apprenticeship requirements, a few of which overlaps with the MBA. 

“Coaching suppliers should not breaking any guidelines by promoting an MBA qualification as one thing that senior chief apprentices could progress onto after finishing their apprenticeship. However employers or the apprentice should fund the extra coaching and evaluation themselves individually.”

One critic of the federal government’s method, former kids’s commissioner Anne Longfield, stated Mr Halfon’s refusal to outlaw using the levy to part-fund MBAs was “weird” and flew within the face of what it was meant for.

Ms Longfield, now chair of the Fee on Younger Lives, stated: “When budgets are tight and employers are determined for expert younger individuals, it’s weird that any of the apprenticeship levy is being diverted in direction of MBAs benefiting individuals who have already got well-established careers. 

“I urge ministers to assume once more and guarantee all this funding goes the place it’s wanted most.”

And Anne Milton, the previous Conservative MP who was expertise and apprenticeships minister between 2017 and 2019, echoed these feedback, saying: “For some years there was an excellent case for placing a wage restrict on apprenticeships, above which {qualifications} might be half or wholly funded by both the apprentice or the employer.”

The Liberal Democrats’ training spokesperson, Munira Wilson, stated: “This can be a authorities in denial. Ministers have taken their eyes off the ball relating to upskilling individuals throughout the nation. We have to reform the apprenticeship levy to make sure that those that want high-quality apprenticeships most have entry.”

The apprenticeship levy is a cost relevant to companies with an annual payroll above £3m, who should pay 0.5 per cent of their wage invoice in direction of it. They will use this cash to coach apprentices. Any levy that continues to be unspent after two years should be returned to the Treasury.

Since 2017, £100m of taxpayers’ cash has been used to fund govt MBAs, regardless of a authorities try and stamp this out three years in the past. Our investigation additionally uncovered that the levy has been used to fund 55,000 executives and graduates, at a value of £1bn, to take two grasp’s-degree-equivalent programs badged as apprenticeships. This use of the levy has come at a value to younger individuals, with 100,000 fewer under-25s beginning apprenticeships than earlier than it was launched in 2017.

Using the levy to subsidise MBAs has drawn criticism from former Tory training secretary Gavin Williamson, former Labour training secretary Alan Johnson, and London mayor Sadiq Khan, in addition to from assume tanks, high-street bosses, and representatives of assorted industries, together with hospitality and tech, who’ve referred to as for pressing reform of the system. The CEO of Lush, Mark Constantine, additionally spoke out, as did Tesco chief Ken Murphy, who stated “It is evident the levy shouldn’t be working.”

Julia Hobsbawm OBE, an writer and an professional on the way forward for work, additionally added her voice to the decision for reform, saying: “Any authorities value its salt wants to have the ability to reform or drop dangerous insurance policies which don’t work. The apprenticeship levy’s failures are properly documented. The cash must be getting into its entirety to enlarge the pool of unskilled entrants to the job market. As a substitute, because of bureaucratic loopholes being exploited, it’s being egregiously used to high up coaching for well-qualified, extremely paid mid-market managers. Pressing motion must be taken.”

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