Cuts to apprenticeship funding will be 'devastating in deprived areas', Labour MPs say

The 55 MPs warn the cuts will be devastating in deprived areas

Tottenham MP David Lammy organised of the letter (AFP/Getty)

Fifty-five Labour MPs have written to ministers to ask them to rethink sharp cuts to inner-city apprenticeship funding handled by the Skills Funding Agency (SFA).

In a letter seen by The Independent, the Labour MPs warn the cuts will be “devastating in deprived areas”, which many of them represent.

The funding changes will take effect from May 2017 and will see apprenticeship funding for 16-18 year olds from the SFA slashed by 30 per cent, with estimated 50 per cent cuts in the most deprived areas of the country.

The SFA cuts will also fall on some apprenticeships where there are skills shortages, such as in housebuilding. An analysis originally undertaken by trade magazine FE Week found that level 2 apprenticeships in construction were among those facing between 27 per cent and 52 per cent cuts dependent on location.

Tottenham MP David Lammy, the organiser of the letter, said the Government “talk a good game” on social justice but was in fact slashing programmes for people trying to improve their life chances with hard work.

“These cuts are a direct attack on social mobility and a direct attack on the life chances of working class kids,” he said.

“The Government talk about social justice and helping people from disadvantaged and low income backgrounds to get on in life, but time and time again they take from the poor and give to the rich.

“Further education and skills provision in this country has already been decimated over the last six years and it is totally wrong that this Government continue to see apprenticeships as the poor cousin to higher education”.

The Government says the overall apprenticeship budget will rise to £2.5bn by 2019-20 despite the cuts to the SFA funding, with increases elsewhere to make up the difference.

Funding will increasingly be placed in the hands of businesses, and the Government is bringing in a new apprenticeship levy for larger businesses with an annual pay bill of over £3m.

But the Association of Employment and Learning Providers (AELP), which represents training organisations who deliver three quarters of Britain’s apprenticeships, said some details of the changes would lead to an “apprenticeship desert” in disadvantaged inner-city areas.

A spokesperson for the AELP said: “Estimates by funding experts vary because of the complexity of the Government’s new funding proposals but the apparent removal of area and disadvantage elements could mean funding rates cut by half for the most vulnerable and needy learners on apprenticeships.

“The end result would be that these learners would have the choice of an apprenticeship taken away from them and areas such as inner London becoming apprenticeship deserts.”

Apprenticeships and Skills Minister Robert Halfon, who the letter is addressed to, said the Government’s reforms would help young people.

“This Government is doubling investment in apprenticeships because we know they create a ladder of opportunity for our young people. Through the new levy £2.5bn will be invested in apprenticeships by 2019-20 – twice what was spent in 2010-11. That means more money going in to the system and more money on average per apprenticeship.

“We want to encourage employers to take on young people. That’s why they won’t have to pay more to give a 16 –to 18-year-old their first step on the career ladder and why we’re proposing to give employers an extra £1,000 for every young apprentice they take on. This will help to ensure every young person, regardless of background or ability, has the chance to take their first step into work.”

The text of the MPs' letter is below:

Rt Hon Robert Halfon MP

5 September 2016

Dear Robert

Cuts to apprenticeship funding rates

We are writing to you regarding the proposed funding rates for apprenticeships from 1st May 2017, as published by the Skills Funding Agency on Friday 12th August 2016. Based on the proposed upper funding limits for 16-18 year old apprentices, current rates paid to colleges and training providers will be cut by around 30% - this will rise to over 50% for the most deprived areas of our country.

Analysis undertaken by FE Week shows that the two most popular apprenticeships measured by total 16-18 year old starts – level 2 apprenticeships in Business Administration and in Construction – face cuts of between 27% and 52%, dependent on location.

After years of austerity cuts, which have hit those living in the most deprived areas hardest, we are particularly concerned about the removal of the ‘disadvantage uplift’ for an apprentice living in a deprived area. By stark contrast, funding for older apprentices who live in wealthier areas and work at larger employers will actually be increased in many cases.

We fear that the impact of these funding cuts will be devastating in deprived areas, where unemployment rates are already well above the national average, especially amongst young people. Taken in combination with the recent scrapping of maintenance grants to support young people from low income backgrounds who hope to go onto higher education, we are acutely worried that these cuts will do real damage to the life chances of many of our constituents.

Mark Dawe, chief executive of the Association of Employment and Learning Providers, has already warned that many providers are likely to cut back or withdraw provision altogether if these new proposed rates are implemented. Cuts of this nature will mean that apprenticeships will simply no longer be viable in terms of basic delivery, and providers will certainly not be able to offer the high quality programmes that our apprentices need.

These cuts hugely undermine the Government’s pledge to create 3 million apprenticeships by 2020, and also entirely contradict the Prime Minister’s promise to “help anybody, whatever your background, go as far as your talents will take you” in order to create a country and an economy that “works not for a privileged few, but for every one of us”.

We believe that the Government needs to be doing much more to help young people from working class and low income backgrounds move into skilled employment, instead of cutting funding rates for apprenticeships. These cuts would be a step in the wrong direction and we call on you in the strongest terms to think again and reverse them.

Yours sincerely

Rt Hon David Lammy MP

Rushanara Ali MP

Dave Anderson MP

Jonathan Ashworth MP

Ian Austin MP

Tom Blenkinsop MP

Paul Blomfield MP

Rt Hon Ben Bradshaw MP

Karen Buck MP

Rt Hon Liam Byrne MP

Ruth Cadbury MP

Ronald Campbell MP

Sarah Champion MP

Rosie Cooper MP

Jim Cunningham MP

Nic Dakin MP

Thangam Debbonaire MP

Jack Dromey MP

Gill Furniss MP

Mary Glindon MP

Roger Godsiff MP

Lilian Greenwood MP

Helen Hayes MP

Mark Hendrick MP

Sharon Hodgson MP

Kate Hoey MP

Kate Hollern MP

Rt Hon George Howarth MP

Imran Hussain MP

Helen Jones MP

Peter Kyle MP

Holly Lynch MP

John Mann MP

Madeleine Moon MP

Siobhain McDonagh MP

Jim McMahon MP

Lisa Nandy MP

Kate Osamor MP

Jess Phillips MP

Steve Reed MP

Emma Reynolds MP

Marie Rimmer MP

Rt Hon Joan Ryan MP

Steve Rotheram MP

Yasmin Qureshi MP

Virendra Sharma MP

Ruth Smeeth MP

Wes Streeting MP

Gareth Thomas MP

Stephen Timms MP

Karl Turner MP

Stephen Twigg MP

Catherine West MP

Daniel Zeichner MP