Plans to scrap MBA apprenticeships following criticism from Gavin Williamson, the Secretary of State for Education, have been delayed until at least November 2020 at the earliest.
The Apprenticeship Levy
Funding for apprenticeships comes from an apprenticeship levy, which came into force on the 6th April 2017, under which employers with annual wage bills above £3 million set aside the equivalent of 0.5 per of their payroll.Â
One of the approved schemes are so called MBA apprenticeships, which are higher level 7 apprenticeships which are equivalent to a Masters level qualification. They were launched in February 2018, as part of the level 7 senior leader apprenticeship scheme, which allows apprentices to achieve a Master's degree in management, either an MA, MSc, or MBA.
Critics Call MBA Apprenticeships An Abuse Of The Apprenticeship Levy
The use of the apprenticeship levy to fund higher level qualifications, including MBA apprenticeships, has been criticised from the outset. Indeed, back in 2018, Lizzie Crowley, skills adviser at the Chartered Institute of Personnel and Development (CIPD), argued that: "There’s a real risk of abuse to the system and re-badging of existing training schemes internally to reclaim the levy money. The government needs to keep an eye on those types of apprenticeships to ensure they are offering the development planned." In fact, research carried out by the CIPD at the time found that 46% of employers who paid the levy planned to re-badge their training as a means of recouping money that they had paid out under the levy. Moreover, in the first year of the apprenticeship levy, whilst the number of new apprenticeship starts fell overall by 26%, the number of higher level apprenticeships at bachelor degree level and above rose from 5.3% to 12.8%. Furthermore, by the end of the first quarter of 2019/20, there were 6,387 starts (according to FE Week) on the programme which incorporates MBA apprenticeships, costing £115 million. Critics pointed to this as clear evidence of re-badging and recoupment on the part of employers.
On the 27th February 2020, the Secretary of State for Education, Gavin Williamson, wrote to Jennifer Coupland, the chief executive of the The Institute for Apprenticeships and Technical Education (IfATE), the body which is responsible for administering apprenticeship standards, calling for a formal review of MBA apprenticeships. In a statement, the Education Secretary stated: "The levy funds apprenticeships for businesses of all sizes, helping people of all ages and backgrounds make the most of their talents. I am committed to maintaining an employer-led system, but I’m not convinced the levy should be used to pay for staff, who are often already highly qualified and highly paid, to receive an MBA. I’d rather see funding helping to kick-start careers or level up skills and opportunities. That’s why I’ve asked for a review of the senior leader apprenticeship standard to ensure it is meeting its aims."
The Scrapping Of MBA Apprenticeships
In response to the letter from Gavin Williamson, the IfATE carried out a review and decided to revise the level 7 senior leader standard in a manner that now excludes MBA's. The IfATE stated: "As a senior leader, there is no regulatory requirement to hold such a qualification, there is no requirement to be a member of a professional body and an individual would not be significantly disadvantaged in the senior leader job market without such a qualification." However, programme providers will still able to offer the MBA as a non-mandatory qualification, but the costs of this additional element would not be funded by the levy. The IfATE put these proposals out for consultation, with a final decision to be made on the 1st June 2020. However, on account of the coronavirus lockdown, the final decision has been put on hold until November 2020 at the earliest.
