EEF response to inquiry on the economics of HE FE and vocational training

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EEF responded to the House of Lords Economic Affairs select committee on the economics of higher and further education and vocational training.

Below are our recommendations:


Immediate actions needed on the Levy:
1) Review the current maximum 15 funding band capped at £27,000 - The delivery of quality higher and degree apprenticeships in engineering and wider STEM disciplines is likely to exceed this amount. Providers are deterred from offering such courses on the assumption that Levy paying employers are unlikely to pay the additional excess, leaving employers without access to provision.
2) Allowing employers to agree a payment schedule with their providers – the currently mechanics of payments leaving employers accounts on a monthly basis is a disincentive for providers to deliver apprenticeships in engineering, which, have a high upfront cost. Allowing employers to agree a payment schedule with their providers gives employers greater flexibility in spending their Levy funds and ensures that providers and colleges continue to deliver high cost, quality courses.
3) Increasing the amount of unused funds a Levy-payer can transfer to 50% - as skills needs of supply chains increasingly align to OEMs we must ensure Levy funds can be invested across industry, The Government should increase the current cap of 10% to 50% in April 2018. Given the administrative burden involved, many employers will not see value at 10%.
4) No further dilution of the Levy -While manufacturers want to see flexibility on how they spend their Levy funds, they do not want the Apprenticeship Levy “pot” to become diluted. The Levy has already been diluted with a significant amount allocated to the devolved administrations who can then spend those monies however they see fit. Employers are concerned about proposals to use the Levy to fund retraining schemes and other initiatives.

Get T Levels right:
1) Government should allow flexible approaches to delivering the mandatory three month work placement as part of the new T levels.
2) Government should focus on University Technical Colleges (UTCs) to deliver T levels and look to creating further UTCs where there is sufficient employer and learner demand.

Ensuring universities continue to deliver valuable STEM courses and maintain the UK’s position as a global leader in higher education:
1) All STEM courses should have at least an optional placement year included
2) There should be better dissemination of STEM career salaries and in general STEM career paths for young people
3) Government should commit to review the fee income and premium for SIV subjects to ensure it is sufficient to continue to offer high-cost subjects such as engineer
4) A post-study work route for non-EU graduates should be reinstated and students should be removed from net migration targets.

Follow the link below to read our full response.




Education and Skills Policy Advisor

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