Lifetime Loan Entitlement, Apprenticeship Levy and Employer-Funded Training – Policy Contradictions and Practical Implications – FE News
In completing UVAC’s response to the Lifetime Loan Entitlement consultation, having expanded on a response to the Chancellor’s spring statement published by FE News a few weeks earlier, I am struck by a massive policy contradiction.
The Lifelong Loan Entitlement (LLE) is focused on people using government-funded loans to “study, train, retrain and upgrade skills throughout life to meet changing skills needs and employment patterns”Consultation LLE, p8.
In the spring statement, the Chancellor was clear “British employers spend barely half the European average on training their employees. In addition, less than 10% of UK employer training spend is on high quality formal training offered by external providers”, Spring 2022 Statement, p38. The Chancellor also noted “The government will consider whether further intervention is needed to encourage employers to deliver the high quality training the UK needs,” Spring 2022 Statement, p39.
The problem we have is that the government is not clear on the responsibilities of employers, individuals and even the government to pay for post 18 education and training at level 4 and above. This leads to quite significant political contradictions.
Read the Lifelong Loan Entitlement consultation paper and you’ll wonder how it relates to the Chancellor’s desire to make employers spend more on high-quality training. With Lifetime Loan Entitlement, under the Lifetime Skills Guarantee, individuals use government guaranteed loans to fund Tier 4-6 programs. Throughout the consultation, the focus is on the need to ensure that modules and comprehensive programs meet the needs of employers. While this clearly makes sense, few references are made to in-kind support or any financial contribution from employers. The consultation gives the impression that it is the responsibility of individuals to train, retrain and improve themselves throughout their lives and to use the right to the loan (learning?) for life to finance the costs of these activities. I suspect a majority would argue that individuals should make a financial contribution to such activities, but certainly so should employers. With the increased ability of individuals to use loans to fund shorter programs, individual modules, etc., funded by the Lifetime Loan Entitlement, might we not see some employers expecting individual employees use their right for training and development activities that an employer should finance? Indeed, in the worst circumstances, could the Lifelong Loan Entitlement deter employers from investing in training and development, contrary to the Chancellor’s intention?
While it could be argued that employers get a free ride with the right to the loan for life, the same is not true for apprenticeships. Here, employers with payrolls over £3 million pay to fund the delivery and assessment of apprenticeships through the apprenticeship levy. Although the apprenticeship tax is paid by employers, employers have been criticized for spending their tax payments on the “wrong kind” of apprenticeships; that is, the learnings that their organizations need. Read the press about training and employers have spent too much of their levy payments on degree apprenticeships, management apprenticeships, older worker apprenticeships and too little on graduate apprenticeships. Some have also criticized employers for using their levy payments to pay for training that they would have, before the levy, funded from their training budget. Thus, it would appear that “good” employers who have historically done the right thing and invested in the training and development of their staff are now being criticized for using their levy payments to continue investing in training and development. their employees need.
So what should happen? First, we have to recognize that we have excellent programs and policies. Apprenticeship is a political success. Employers use the apprenticeship levy to fund the programs their organizations need to improve performance and productivity and become more innovation-driven. Apprenticeship quickly becomes a challenging program and sheds its past reputation as a good choice for other people’s children. There are, of course, plenty of positives in the lifetime loan entitlement, the flexibility to support different learning options, support for flexible lifelong study, and potentially better course signage. and modules that individuals need to realize their ambitions and aspirations. The problem we have, as the Chancellor has identified, is how to increase employer spending on high quality training that increases organizational performance and productivity and increases competitiveness. The question for the Department of Education is: how does the introduction of the Lifetime Loan entitlement support the policy objective of increasing employer investment in high quality training offered by external providers of all types and all sizes?
From UVAC’s perspective, we would say we need a cultural shift in the attitude of some employers to investing in training and clearer guidance on individual, government and employer contributions to learning throughout life at level 4 and above. Specifically, we need a debate on the employer’s contribution to life loan entitlement. We are disappointed that employers’ support for their employees taking LLE-funded courses has not been considered in the consultation on the policy’s design principles, so far. Employers should be encouraged and even expected to help individuals use their lifetime loan entitlement as effectively as possible. There are a range of possibilities here, working with providers to update curricula, offering internships, career interviews, working with IfATE on professional standards and professional cards. When an employee uses the lifetime loan entitlement to retrain, expect more from the employer. Educational leave and work-based learning support come to mind, but shouldn’t an employer also be required to contribute financially to the program and share the financial burden with the individual and the State ? Perhaps the government should also be clearer on what LLE should and should not be used and where, instead, an employer should invest.
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