DD1479 Employer-Led Apprenticeship Creation Programme

Type of decision: 
Director's decision
Code: 
DD1479
Date signed: 
05 April 2016
Decision by: 
Fiona Fletcher-Smith, Executive Director of Development, Enterprise and Environment

Executive summary

The Employer-Led Apprenticeship Creation Programme (ELACP) was developed to test innovative, employer-led approaches to apprenticeship creation to help realise the Mayor’s ambitions around apprenticeships and influence future GLA apprenticeship intervention strategy. The programme received Mayoral Approval (under cover of MD1405) and was allocated £1.9m from GLA 2014/15 Apprenticeship budget.

The programme has experienced a slow inception phase which meant that partners were not fully delivering in the first four months of the programme. Additionally, it has taken longer than initially expected to engage employers and to transform such engagement into apprenticeship opportunities. Therefore, approval is requested for the extension to the delivery of the Employer-Led Apprenticeship Creation Programme until March 2017.

 

Decision

The Executive Director approves an extension to the delivery of the Employer-Led Apprenticeship Creation Programme to March 2017, including the extension of a fixed term Grade 8 post to manage delivery of the contracts for the period April 2016 to March 2017 at a cost of £53,000. Contractual break clauses will be required due to the extension time period moving into the new mayoral term. The costs can be contained within the £1.9m budget approved by MD1405.

 

Part 1: Non-confidential facts and advice

Introduction and background

1.1    The Mayor of London has led an ambitious business-facing campaign in London which has already helped to create over 220,000 apprenticeships since August 2010 with over 40,000 consistently being created each year. Before 2010, annual starts did not exceed 21,000 (and were often much lower). Through the GLA’s engagement work over the last five years, employers of all shapes and sizes in the capital have made the decision to offer apprenticeships in their companies. The GLA has also added to the national apprenticeship offer with concessionary travel for apprentices in London, funding incentives for small companies, and its most recent ‘University of Work’ marketing campaign, focused on raising awareness of the range and quality of apprenticeships available. 

1.2    On 11 November 2014 the Mayor (under cover of MD1405) approved funding for the Employer-Led Apprenticeship Creation Programme (ELACP), a £1.9m programme funded with GLA 2014/15 Apprenticeship budget. 

1.3    The ELACP was designed to build on the success of the past five years by tapping into the knowledge, expertise and problem-solving ability of Employers, Industry Representative Bodies and Training Providers across the private and public sectors for the creation of new apprenticeship opportunities for London residents. It is designed to engage businesses with little or no previous history of recruiting apprentices, support candidates and help place them with employers to generate as many new apprenticeship starts as possible.

1.4    The programme aims to engage with businesses and business networks that have not taken on apprentices or engaged with apprenticeships in the past 12 months to create new apprenticeship opportunities within their business. 

1.5    Many of the projects are sector-based in order for the programme to test the engagement approaches that work with the various types of employers and to increase the creation of apprenticeship opportunities within growth sectors such as the technology sector which is experiencing major skills gaps but has a low take up of apprenticeships. The programme also has a strong focus on the creative and public relations sectors where there is a high demand for jobs from graduates and those willing to complete internships.

1.6    The programme is pan-London and is delivered through seven organisations

Delivery Organisation

Project Name

Geographical Focus

 Creative and Cultural Skills

ELACP Creative and Cultural Industries

16 London boroughs

 Creative Pioneers

Tech and Digital Skills Consortium

Pan London

London Borough of Islington

Enhanced Apprenticeships for Health and Social Care

Pan London

Public Relations Consultants Association (PRCA)

Apprenticeship Creation in PR and Creative Sectors

Pan London

 Prevista

The Capital Apprenticeship Promotion Programme

Pan London

 SOLOMAN

Apprenticeships Mean Business

Pan London

Westminster Adult Education Services (WAES)

WeZapp

Pan London

1.7    A bespoke Overall Unit Cost was derived for each application by dividing the overall project cost by the volume of apprenticeship outcomes sustained for 13 weeks proposed by the applicant. The Overall Unit Cost does not exceed £500 for any of the projects. All of the contracts are delivered through Payment by Results (PBR). 

1.8    Grant agreements were in place for the seven ELACP Delivery Partners by the end of March 2015 with the expectation that delivery would commence immediately. However, a slow inception phase meant that partners were not fully delivering the programme until July 2015.

1.9    Performance for the programme has been steadily improving as delivery has progressed. In Quarter One 2015-16, the programme achieved 180 apprenticeship starts; this increased to 334 apprenticeship starts in Quarter Two. However, despite the recent improvements in performance, the programme is unlikely to achieve its outcomes by the original end date. 

1.10    Additional time is required to engage and support eligible employers for the following reasons:

i.    The majority of ELACP providers had initially planned to engage employers through large events and online marketing. However, they have found that employers respond better to 1-1 engagement approaches which take longer to deliver. 
ii.    Some partners have identified sector-specific issues that they have had to adapt their approach to. For example, some types of employers need more incentives than others to create apprenticeship opportunities – GPs are less likely to hire apprentices unless there are wage incentives. Partners delivering the Enhanced Apprenticeships for Health and Social Care have worked with CCGs and CPENS to secure additional funding from Health Education North Central and East London (HENCEL) that will go towards the salaries of apprenticeships that have been secured for the ELACP, however it is unlikely that this funding will be released and spent in time for the 13-week sustained apprenticeships to be achieved by the original programme end date.
iii.    The quality of applications for apprenticeships is often low; as a result, pre-apprenticeship support has played a key role in delivering the programme and supporting harder-to-reach groups. Over 1,600 candidates have been supported by the programme to apply for apprenticeship positions, with only 526 of these being successful at securing a place. In addition to this, it has taken time to manage the expectations of employers for apprenticeships, particularly within the recruitment process when designing the job description and in selecting the successful candidate. Delivery partners need additional time to support applicants who are further from the labour market to successfully secure an opportunity that is suited to their development needs and aspirations while supporting employers to create an opportunity that meets their business needs. A higher number of successful outcomes will represent better value-for-money to the GLA and give more participants a positive experience of the Mayor’s apprenticeship programme. 

iv.    Some sectors have found it more difficult than others to find suitable candidates with the right qualifications and soft skills for the opportunities that have been created, leading to the withdrawal of interest from employers. Partners have been building referral processes with other employment support projects like Young London Working (part of the Mayor’s Fund for London) to gain access to a wider candidate pool as new opportunities become available. More time is needed to assess the success of these new referral networks.
v.    ELACP is a pilot programme that is testing different approaches to employer engagement with SMEs within various sectors in order to inform future apprenticeship creation programmes both internally and externally; the low level of apprenticeship starts to date makes it difficult to fully assess key lessons and best practice that could influence future policy decisions around apprenticeships which remains a high priority for central government and all of the public sector as a whole.

1.11    Since the development of ELACP, there has been a renewed focus on apprenticeships as a result of the Conservative government’s target of delivering three million apprenticeships starts by 2020. Given the Government’s new ambitious target, it is highly likely that apprenticeships will be a priority for the new Mayor, therefore extending the ELACP delivery period will provide a useful opportunity to identify best practice in respect to engaging employers in apprenticeship activity to inform future GLA apprenticeship interventions under the reformed apprenticeship system.

1.12    Of particular interest is identifying successful employer engagement strategies and the identification of the types of support required by SMEs to identify relevant apprenticeship opportunities and recruit suitable apprentices.

 

 

 

Objectives and expected outcomes

2.1    A decision to extend the delivery of the programme to March 2017 is expected to allow delivery partners to fully achieve the programme’s original outcomes with no additional delivery costs, giving businesses and candidates the best chance of achieving a positive outcome as a result of their participation. This option also allows the GLA to build up expertise around apprenticeship creation programmes positioning officers well to influence the apprenticeship agenda in coming years. The extension to the programme would cost an additional £53,000 contract management costs (Grade 8 Senior Project Officer). However, the reallocation of outcomes from underperforming projects to others that can deliver more outcomes at a cheaper overall unit cost will result in a saving of £59,707 which will absorb the additional contract management costs.  

Table 1: Original forecast of spend by year

 

2014/15 £

2015/16 £

2016/17 £

TOTAL

£

Soloman

24,400

185,225

15,376

225,001

Digital Skills

45,000

335,950

19,050

400,000

Public Relations

15,223

91,046

5,083

111,352

Prevista

42,430

339,008

18,564

400,002

Islington

0

72,600

2,400

75,000

Westminster Adult Education Svc

0

377,203

22,800

400,003

Creative & Cultural Skills

5,000

87,501

7,500

100,001

TOTAL

132,053

1,488,533

90,773

1,711,359

 

Table 2: Financial Forecasts - Programme Extension to March 2017 

 

2014/15 £

2015/16 £

2016/17 £

TOTAL

£

Soloman

26,280

105,198

195,719

327,197

Digital Skills

40,000

33,100

35,300

108,400

Public Relations

11,135

44,859

55,357

111,351

Prevista

40,000

162,693

197,307

400,000

Islington

0

36,425

38,575

75,000

Westminster Adult Education Svc

0

288,624

240,980

529,604

Creative & Cultural Skills

5,000

50,100

45,000

100,100

TOTAL

122,415

720,999

808,238

1,651,652

 

Equality comments

3.1    The programme has targets around supporting groups with high levels of worklessness including Black and Minority Ethnic (BAME), people with disabilities, and women to access apprenticeships. These targets have been met by the majority of ELACP projects and in some cases exceeded. 

3.2    The GLA has appointed ICF International to provide a quantitative and qualitative impact evaluation of the programme. Evaluators will assess the effectiveness of the programme in engaging and supporting Londoners from hard to reach groups and the spread of provision across London. There will be particular focus on: 

i.    Whether the support offered to participants (employers and apprenticeship candidates) during their time on the programme appropriate to the needs of the client group and if they were considered to align with ‘best practice’ methodologies.
ii.    How the complexity of participant need impacted upon achievement, and whether improvements have been made.
iii.    How accessible the programme was for hard to reach groups.

 

Other considerations

4.1 The key risks associated with the delivery of the programme within the extended timeframe are:

 

Risk description

Mitigation / Risk response

RAG rating

1

Economic Climate – slowdown in private sector growth leading to reduction in new apprenticeship starts.

Apprenticeships marketed to employers more strongly as a way to accelerate business growth in the longer term by meeting skills needs.

A

2

ELACP providers struggle to find enough eligible employers.

 

 

Statistics around apprenticeships in London demonstrates the existence of a large pool of eligible employers. Best practice for reaching eligible employers and marketing the programme will be shared across projects as they are identified.

A

3

The current AGE incentive of £1,500 may not be sufficient for London employers.

While delivery partners have started reporting increased enquiries about the increased AGE grant for SMEs which has now ended, this has not led to a significant reduction in the number of apprenticeships being created through the ELACP.  Delivery partners will continue to promote the benefits of apprenticeships to employers.

G

2

Projects don’t have the capacity/ staffing to deliver services

 

 

GLA project managers have discussed the possibility of an extension to the programme with all delivery partners; they have confirmed their intention to continue delivery should the programme be extended.

G

3

Projects fail to achieve target outputs set

 

 

Performance will continue to be monitored rigorously with bi-monthly review meetings and monthly reporting. Funding will be made available on an outcome-related performance model and therefore claims will be paid on evidence of the delivery of outputs and outcomes. Poor performing contracts will have funding withdrawn if minimum performance levels are not met.

A

 

4.2 The proposed extension to the programme will result in additional apprenticeship outcomes that will contribute to the Mayor’s Manifesto commitment of delivering 250,000 apprenticeships by 2016 and will help the next Mayor to identify successful employer engagement strategies to shape future apprenticeship creation programmes in London.

 

Financial comments

5.1    Approval is requested for the extension to the delivery of the Employer-Led Apprenticeship Creation Programme until March 2017, including the extension of a fixed term Grade 8 post to manage delivery of the contracts from April 2016 to March 2017. The cost of this is expected to be £53k and is contained within the existing £1.9m budget approved by MD1405.

5.2    If the GLA becomes liable for further costs relating to the appointee, these costs would be subject to further approval via the GLA decision making process and costs contained within the existing budget provision for this programme.

 

Planned delivery approach and next steps

Activity

Timeline

Vary grants in line with revised profiles and delivery period

Mar 2016

Work with Finance to ensure that budgets are amended to reflect revised annual delivery

Mar 2016

Delivery End Date

Mar 2017

Project Closure

May 2017