Apprenticeship Funding Fever

by Mark Corney


The debate on apprenticeship funding is reaching fever pitch. The Coalition consultation* closes in less than two weeks, the Liberal Democrats** and Labour*** have set out their stalls and the Conservatives will do the same at the end of the month.

In recent days, the debate on the Coalition consultation has shifted away from adult apprenticeships to 16-18 apprenticeships. Mandatory employer cash contributions to adult apprenticeships seem to be a done-deal and PAYE looks the favoured model for distributing public funding.

Less clear, however, is whether 16-18 apprenticeships will be partially funded with mandatory cash contributions, partially funded with voluntary cash contributions or fully funded as now. There is then the issue about whether the public subsidy – at whatever level – is distributed through the PAYE system.

The Liberal Democrats, as distinct from the Coalition, support distributing the public subsidy for adult apprenticeships to employers through the PAYE system, though they make no mention of mandatory cash contributions. But the party seems content with the present system of fully funded 16-18 apprenticeships allocated to providers.

Labour, on the other hand, has rejected devolving apprenticeship funding to each employer, use of the PAYE system and mandatory cash contributions. Instead, the party proposes to devolve the £1.5bn youth and adult apprenticeship budget to employers on a collective basis to Industrial Partnerships and reformed Sector Skills Councils.  

Mandatory Cash Contributions to 16-18 Apprenticeships

In advance of the Campaign for Learning's seminar on the Government's current consultation reform for Apprenticeships, 19th September, Mark Corney asks whether the funding model for 16-18 apprenticeships will include mandatory cash contributions from employers.


Mandatory cash contributions by employers is a common element of the Direct Employer Payment Model, the PAYE Employer Payment Model and the Provider Payment Model outlined in the apprenticeship funding consultation.*

But the critical question is whether employer cash contributions are required as a pre-condition for the release of public funding for 16-18 apprenticeships as well as adult apprenticeships.

The case for concluding that the Coalition Government is indeed considering the proposition of mandatory employer cash contributions to 16-18 apprenticeships is compelling.

Apprenticeship Funding Reform: The Big Issues

In advance of the Campaign for Learning's seminar on 19th September, Mark Corney assesses the Government's current consultation on funding reform for Apprenticeships in England and sets out the issues.

Money will ultimately determine the outcome of the apprenticeship funding consultation.* Who pays, how much they will pay and who controls the purse strings are the questions that matter. 

Getting the financial incentives wrong in small scale pilots is permissible. Getting them wrong in large mainstream programmes such as apprenticeships is not an option. 

The Coalition Government published its response to the Richard Review in the Spring. Yet the ministerial foreword to consultation paper published in July tellingly states “one crucial aspect of this reform agenda was deliberately not addressed – funding.”