Evidence to the Richard review of apprenticeships

The Association of Accounting Technicians (AAT) is delighted to have the opportunity to offer evidence to this important review of Apprenticeships. Accountancy is one of the success stories of the recent development of apprenticeships, particularly in higher apprenticeships where in 2010/11 accountancy represented 80% of all apprenticeship starts at Level 4+.

Overall apprenticeship numbers are shown in the table below.

2009/10 / 2010/11 / 2011/12 (part yr)
5,360 / 6,780 / 7080

About AAT

AAT was established in 1980 to provide a recognised qualification and membership body for accounting technicians.

AAT has over 120,000 members just over 66,000 of whom are students.

AAT is the only UK-based professional and awarding body dedicated solely to the education, training, development and support of accounting technicians. AAT's qualification and membership develop and ensure relevant and practical accounting and finance skills for life.

AAT provides an innovative competence-based accounting qualification based on national occupational standards for accounting. The qualification has been designed to improve the employability of AAT members and to support the efforts of employers in raising the standards of performance in the workplace, and to offer a clear progression pathway to the highest levels of the accountancy profession.

The AAT qualification is accredited on the Qualifications and Credit Framework (QCF) and its equivalents in Scotland and Wales. Until September 2011 the qualification was offered at Levels 2, 3 and 4. From that date a Level 1 “AAT Access” qualification has also been available. Each level offers a valuable qualification in its own right as well as progression opportunities to further qualifications, higher education or employment depending on the aspirations of the individual. The other element that marks out the accounting apprenticeship is that offers the benefits of professional preparation with the opportunity to be part of a professional body and subject to a code of professional ethics.

The qualifications underpin the Accountancy Apprenticeship frameworks offered at Levels 2, 3 and 4. Accountancy apprenticeship starts having shown consistent growth rising from 2,670 in 2002/03 to an estimated 7,080 in 2011/12.

AAT qualifications are open access with no formal academic requirements for entry other than a reasonable level of numeracy and an ability to complete assessments and written projects in English. Students with relevant academic qualifications or prior accounting experience may be able to start at higher levels on the pathway. AAT courses are available throughout the UK at over 400 centres accredited by AAT. Such approved assessment centres may be Further Education Institutions (FEI) or private sector providers. Options for flexible and distance learning are also available and AAT has been a pioneer in e learning and assessment.

Core Message

This document offers a specific response to the questions asked in the call for evidence. However there are some key factors that enable AAT to deliver such a successful programme, which we feel it is important to highlight.

We would define 3 main elements that underpin success.

  1. The first that has been central to AAT’s success has been its own status as a professional body and the fact that the chartered accountancy profession was instrumental in its foundation. The Chartered Institute of Public Finance and Accountancy (CIPFA), the Institute of Chartered Accountants in England and Wales (ICAEW), the Chartered Institute of Management Accountants (CIMA) and the Institute of Chartered Accountants of Scotland (ICAS) remain as sponsoring organisations.

The profession identified the need for a unified training and professional body for those working at technician level within accountancy as well as a progression route into the profession. AAT was set up as the vehicle to deliver those twin objectives.

  1. The link with the chartered profession has been matched by a parallel development of links with employers. 30,000 UK employers have an employee either qualified or training with AAT. AAT’s accredited employer scheme has 830 members ranging from national and local government bodies including HM Treasury through SMEs to blue chip companies such as Rolls Royce and Proctor and Gamble
  1. As a professional association itself, AAT is governed by and for its members providing a vital direct with those running their own practices and operating in the workplace.

Taken together this creates a tripartite partnership to meet the developing skills needs for accounting staff across all sectors of employment. Most importantly in this context, the partnership creates a commitment to the renewal of the workforce through apprenticeships and vocational training.

Since our foundation the AAT accounting qualifications have remained our core offer. They have been continuously developed and updated to meet the needs of employers and learners but the base structure, as a suite of progressive vocational qualifications has not changed. What has changed has been the regulated qualifications policy and funding environment in which we have to operate: initially NVQs, then the migration to the QCF and now being successfully delivered in the context of apprenticeships.

AAT is successful despite not because of the myriad of successive policy frameworks and processes. What matters is that an individual who invests in getting a qualification gets the benefit of improved job and career development prospects. The employer values the qualification if it delivers the pipeline of competent staff they need.

Thus the successful translation to apprenticeships has come about because there was already an established model of work-based training that effectively mirrored the apprenticeship model but had not traditionally been described as such.

The message that we hope the review will take from this is that the starting point for success is embedding a culture of work-based learning, founded on partnership and a real understanding of the value it delivers for employers and employees. If apprenticeships are to be truly effective they must be a core part of employers’ workforce strategy and not just an add-on.

Apprenticeships have been often talked about as a brand in recent debate. In so far as that is true, our experience is that it is not the brand wrapping but what is inside it that is the key to success and sustainability.

  1. Principles
  2. What should the aims and objectives of apprenticeships be?

AAT would contend that over recent years the term “apprenticeship” has lost its basic functional meaning and has come to mean what the Government funds as an apprenticeship. In some areas this has led to apprenticeship recruitment being led by providers primarily concerned with accessing funding opportunities. In such cases the risk is that there will not be full engagement or long-term

commitment from employers. This threatens the long-term sustainability of apprenticeship programmes.

If we are to have a meaningful debate AAT would argue that it is important to agree on a definition of apprenticeships that is a functional description that maintains the integrity of what they are. Our view is that the aim and objective of apprenticeships should be to develop a skilled, educated and motivated workforce with the skills knowledge and experience to perform their job role, with the potential to progress and contribute fully within the workplace.

Much of recent debate has moved from this functional objective to see apprenticeships more as a function of Government policy driving two different and potentially conflicting agendas. One as a means of addressing the problems of youth unemployment and second as a route to deliver the higher skilled workforce required for global competitiveness.

While these are both laudable aims they can lead to significant confusion in policy. Just one example of this is the SASE, which is far too restrictive and starts from a presumption of the lowest common denominator rather than allowing for occupational flexibility.

Of course funding is important and Government must prioritise spending within limited resources. However funding decisions should be based on quality and outcome not narrow definitions.

In this context it is also worth reflecting on the value of imposing the use of the term apprentice across all sectors. Accountancy has a long-standing tradition of work based vocational training at all levels of the profession. It is our view any AAT trainee who is in relevant employment, undertaking the qualification and is supported by their employer (not just financially but mentored and trained) is an apprentice in the broad sense.

1.2.Who should apprenticeships be for?

AAT would argue that if one starts from a functional definition it follows that apprenticeships will be open to anyone whether they are new to employment or new to a particular trade or profession. This marks a change from the traditional assumption that an apprentice will be a young person starting out and reflects the demand for a flexible workforce involving multiple changes in job role. The training needs of older workers and the long-term unemployed cannot be ignored and access to apprenticeships should be based on the stage an individual is in their working life not their age. An example, which is important to AAT, is the number of women returners wishing to acquire new skills. Apprenticeship opportunities should not be closed to them and those in a similar position.

Again it is important to separate out the question of broad eligibility from who should receive Government funding. It is quite legitimate for Government to direct funding towards specific target

individuals or sectors. AAT would recommend that funding should be directed on the basis of national and regional analysis of skill shortages and employment patterns with sectoral and regional flexibility to meet short-term demand. The key point is that funding should not define who and who is not an apprentice.

1.3.What outcomes should apprenticeships aim to deliver – for individuals, foremployers, and for the wider economy?

The availability of apprenticeships should open access to training and employment opportunities. After successful completion apprentices should expect to be fully competent to undertake the job role for which they have been apprenticed and hold industry-recognised qualifications to evidence that. They will be highly value in the employment market and have the potential and eligibility to progress in their career. Employers will develop a flow of high quality potential employees to sustain and enhance the skills of their workforce and their competitiveness. The wider economic benefit will derive from these factors.

  1. Content
  2. What should the defining features of a high quality apprenticeship be? What should a high quality apprenticeship involve or contain?

AAT would offer the following as characteristics of a high quality apprenticeship:

  • the apprentice will be employed,
  • knowledge and skills will be developed within the workplace through mentoring and support and through high quality off the job training,
  • the apprentice will gain industry recognised qualifications and through them, a platform and opportunity for progression.
  • successful apprentices will be valued by their employer and in the wider labour market.

2.2.Should this differ for different sectors, types of learners or types of employers?

These core elements should remain exactly the same. Having said that there will and should be differences in the detailed content and structure of apprenticeships to reflect the different circumstances of sectors, learners and employers. By way of example the requirements for health and safety training for a construction worker are very different to those for an accountant so commonality in that area does not make sense.

AAT would go further and argue that there are differences in literacy, numeracy and ICT requirements, which should be left to employers to decide. In accountancy for example ICT should mean a requirement to be able to learn/use industry standard accounting packages such as SAGE, whereas in the motor trade it might require understanding of engine mapping software. Neither simply requires a basic knowledge of word processing and spread sheets, which is what the basic functional skills requirements provide.

AAT has consistently argued that the SASE has been too restrictively focused on inputs rather than outcomes. The measure of quality should not be whether the knowledge and skills elements have been separately assessed or how many compulsory functional skills elements are included. The test should be ‘is the framework delivering individuals who can do the job, whose employability has been enhanced and are valued in the labour market.

AAT would also contend that the time spent on an apprenticeship is not necessarily an indicator of quality. We recognise that there should be a minimum period to gain the key workplace experience. However if an able learner is able to progress more quickly through phases of a qualification the funding mechanism should not preclude them from doing so.

2.3.How can we ensure the training offered really reflects employers’ needs?

At first sight this seems a strange question. If the training within apprenticeships were not meeting employers’ needs why would they take on an apprentice? However this does not wholly take account of the issues raised above about the need for flexibility. There maybe elements of functional skills training for example, that are prescribed by the SASE that do not reflect employer needs but are tolerated.

The full answer must be to fully engage employers in the design of apprenticeship frameworks.

The one note of caution we would highlight is that in allowing flexibility one must not loose sight of the key quality indicator of value across the labour market. Employers must not be enabled to use apprenticeships that too narrowly meet a niche requirement that offers no transferability or opportunity for progression.

The SSCs have been the primary vehicle for delivering cross employer views. However, from our own experience there is often not enough employer awareness and engagement with SSCs. Professional Bodies have longstanding and wide ranging relationships with employers and a compact with employers to deliver the skills that they need. Professional Bodies should be given a defined role in identifying sector needs and standards.

2.4.What role should qualifications play in an apprenticeship, and how can we ensurethese qualifications are fit for purpose?

Qualifications should play an important part in apprenticeships as they are the best available mechanism to give the apprentice independently assessed evidence of competence and through that a passport to progression.

However this will only be fulfilled if the qualifications are recognised as industry standard and are understood and valued by employers.Our experience is this can best be assured if there is an active partnership between employers, providers, awarding bodies and, where appropriate, as in accountancy, with professional bodies to ensure that qualifications remain relevant and fit for purpose. This also requires a flexible qualification development and regulation regime that places an emphasis on sector and employer needs. Although there has been some welcome deregulation, the system too often leaves awarding bodies designing qualifications to meet the requirements of regulators rather than the needs of learners or employers.

Having emphasised the importance and role of qualifications one of the key things that we have learnt through our own experience of employing apprentices is that one cannot underestimate the benefit of work itself to the apprentice. It is not just knowledge and skills they acquire but what they learn just by being in a workplace with the day-to-day disciplines involved. For young apprentices it is about maturing, developing good work habits. For everyone it is what you learn by experience and what you absorb by being in a work environment.

  1. Delivery
  2. What should government’s role be with regard to apprenticeships?

The role of government should largely be an enabling one. Light touch regulation should set core minimum standards focussed on outcomes allowing for greater flexibility in the development of apprenticeship frameworks.

The government also has a wider responsibility to ensure a level playing field between academic and vocational routes. They should promote apprenticeships, specifically ensuring that there is effective advice and guidance so that individuals are aware of the vocational options available to them.

3.2.What should employers’ role be?

The role of employers is crucial. To embed success, apprenticeships must become a regular part of workforce strategy not just an add-on to satisfy the latest government programme or a part of company CSR strategy. Employers, professional bodies and trade associations, as we have already identified, also have an important role in ensuring that associated qualifications remain up to date and fit for purpose.

One should also not forget the role of fellow employees in the success of apprenticeships. Traditional apprenticeships were built on the notion of the apprentice working beside and learning from the master and then in turn passing on their skills. This is offered in the professions but some attention should be paid to how this culture can be fostered more widely.

3.3.Who should pay for what?

AAT believes that in principle the cost of apprenticeships as in other areas of learning should be shared between employers, learners (if only through lower pay while apprenticed) and government. Government funding should be focussed on supporting identified priorities which will change over time, which might include factors of age e.g. 16-19, particular business sectors, e.g. SME or particular skill shortage areas e.g. STEM.

  1. Delivering value for money and boosting access
  2. How can we ensure value for money for government investment in apprenticeships?

In defining value for money the focus should be on ensuring first and foremost that there are appropriate measures of success that relate not just to pure numbers going through the system but to the real outcomes in terms of employability and productivity for employers.

4.2.How can we boost employer and learner demand for apprenticeships?