Apprenticeships for adults offer a good return for the public money spent on them overall, according to the National Audit Office. However, the Department for Business, Innovation and Skills could improve value for money significantly by targeting resources on areas where the greatest economic returns can be achieved.
The Apprenticeship Programme expanded by 140 per cent between the 2006/07 and 2010/11 academic years. Apprentices aged over 25 account for 68 per cent of this increase. Most of the increase in the programme has been in just 10 apprenticeship occupations. Apprentices and inspectors are generally positive about the quality of apprenticeships, with 91 per cent of apprentices satisfied with their training; but the rapid expansion of the programme brings risks that need to be managed. One concern is that in 2010/11, 19 per cent (34,600) of apprenticeships lasted less than six months, when most are expected to last at least a year.
The NAO estimates that advanced apprenticeships yield higher returns than intermediate apprenticeships. Spending on adult apprenticeships overall could be producing an economic return of £18 for every £1 of public spending, compared with the Department’s estimate, based on a different set of assumptions, of £28 per £1 spent. But all these estimates assume that the training would not have happened without public funding. The Department has not yet assessed the extent to which this is true. It has commissioned research on the matter and expects to know the results in early 2012. The Department and the National Apprenticeship Service have not so far targeted specific sectors on the basis of economic returns, but intend to do so in future.
Most apprenticeships in England are at a lower level than those offered by other countries. For example, only 33 per cent of apprenticeships are at an advanced level (equivalent to two A-levels), compared with 60 per cent in France.
Overall, the Apprenticeship Programme is well coordinated and is better managed than a previous government programme, Train to Gain, for example by maintaining a central register of approved providers, with a single national contract and account manager for each.
The rates paid to training providers by the Skills Funding Agency on behalf of the National Apprenticeship Service are not based on sufficiently robust information on the cost of the training provision, and so the Agency and Service do not know the extent to which providers may be earning surpluses or incurring losses on some types of apprenticeship. Furthermore, some employers are not paying the expected contribution towards training providers’ costs.
"The apprenticeships programme has been providing a good return for public spending. Nevertheless, the Department should set its sights higher in order to get better value from the £0.5 billion and rising now spent on adult apprenticeships each year. It needs to target resources more effectively; confirm the training provided is in addition to what would have been provided without public support; and make sure that the funding system is informed by robust information on the cost of delivery."
Amyas Morse, head of the National Audit Office
Notes for Editors
There has been a government-run Apprenticeship Programme since 1994. The programme provides public funding to training providers – mainly private firms and further education colleges – to deliver training to support apprenticeships’ qualifications. The lead departments for the Programme are the Department for Business, Innovation and Skills (adults) and the Department for Education (16-18 year olds). The NAO’s report focuses primarily on adults.
The National Apprenticeships Service, which is part of the Skills Funding Agency, has overall responsibility for management of the Programme. The Agency supports the Service by providing a range of operational functions including management of relations with training providers.
Apprenticeships are available at different skill levels: intermediate (including NVQ Level 2 and equivalent to five A*-C GCSEs), advanced (including NVQ Level 3 and equivalent to two A levels) and higher (including NVQ Level 4 and equivalent to a foundation degree).
The total funding for the Apprenticeship Programme was £1.2 billion in 2010-11, including £451 million (38 per cent) for adult apprenticeships.
Figures in the NAO report for apprenticeship starts in 2010/11 come from the Statistical First Release of October 2011 and are provisional figures for the full year. Final figures for the full year are published on 31 January 2012, too late for inclusion in this report. They are available at www.thedataservice.org.uk/.
Press notices and reports are available from the date of publication on the NAO website, which is at https://www.nao.org.uk/. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 880 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.