National Apprenticeship Week blog series: UCEM Principal, Ashley Wheaton, addresses Damian Hinds (Secretary of State for Education)

Posted on: 7 March, 2018

Dear Damian Hinds

Since September 2015 UCEM has been at the forefront of one of the key aspects of the apprenticeship reforms, by delivering degree apprenticeships that lead directly to chartered membership of one of the leading professional bodies in the Built Environment. Government data shows that UCEM is one of the largest providers of degree apprenticeships in the country, responsible for nearly 10% of all starts across all sectors and subject areas in 2016/17.

UCEM has positively embraced the challenge of delivering degree programmes in a new context, working closely with our extensive network of employers in construction and real estate to provide programmes which meet their training needs. Part of this challenge has been to navigate a different funding model, securing funds initially from the ESFA via repeated procurement exercises, then working with employers to allocate the funds in their Levy accounts. Whilst the funding available to date has been barely adequate in view of the substantial additional work that a degree apprenticeship involves, recent decisions by Government have only served to make the financial viability of these programmes even more marginal for universities.

Take the example of the Head of Facilities Management degree apprenticeship where the funding cap was set at £18,000:

Until recently the standard funding cap applied to Level 6 degree apprenticeships that include a full Bachelor degree has been set at £27,000. As you will be aware from the review of Higher Education fees that you launched recently, the standard fee charged by most universities for a Bachelor degree is £27,750.

There are a number of additional costs associated with a degree apprenticeship delivery which make it hard to operate within the funding cap, even for UCEM as one of the most cost-effective providers in the HE sector (UCEM’s fees are significantly lower than those charged by the majority of universities, currently £17,255 in total for an undergraduate degree). These include the cost of end-point assessment, working with the employer to ensure the apprentice receives the on-the-job training they need, carrying out regular progress reviews, reporting to employers and evidencing the 20% off-the-job training.

I was completely baffled by the decision made by the Institute for Apprenticeships recently to set the funding cap for the Head of FM degree apprenticeship at £18,000. There appears to be no rationale for this decision and no transparency as to how it was arrived at. This is so far below the total cost of delivery that it is completely unrealistic to expect any university to offer it. Furthermore, it adds to the risk that employers will be unable to source the high-quality training they need, leaving their levy funds unspent. I would welcome your thoughts on why any institution should take on business on these terms. I would also be interested in your justification for the final 20% of the total apprenticeship funding being withheld until the end-point assessment when this typically represents less than 5% of the total cost.

I, however, believe that these funding challenges can all be overcome. They can all be dealt with on the basis that the overall system is now well-funded due to the introduction of the Apprenticeship Levy, which is putting up to £3 billion per year into the pot. Most employers I speak to are struggling to see how they will fully utilise their Levy funding and are puzzled by the continual barriers that are put in their way to prevent them from spending it.

Here are three simple recommendations to ensure that apprenticeship provision is properly funded and financially sustainable for institutions committed to delivering it:

• When setting any funding cap, ensure there is an effective process for consulting with providers to check that the supply-side is actually able to deliver the standard for the fee level proposed;
• Align the funding cap as a minimum with the equivalent level of fees for educational programmes for non-apprenticeship provision, i.e. fund all Level 6 degree apprenticeships at £27,000;
• Reduce the 20% retention to a value that more accurately reflects the cost of the end-point assessment.