Increase in the annual number of new apprentices in the last five years
24 per cent
Increase, in real terms, in modern apprenticeship funding in the last five years What’s this report about?
Our audit focused on Skills Development Scotland (SDS)’s administration of modern apprenticeships and the funding it distributes to training providers to train and assess apprentices. Our audit assessed whether modern apprenticeships provide value for money. Our objectives were to establish:
modern apprenticeship costs and activity and roles of the organisations involved
how well modern apprenticeships are managed and if there is scope to make efficiencies.
Key messages The annual number of new apprentices increased in the last five years to around 25,700 in 2012/13. In 2011/12, the Scottish Government introduced an annual target of 25,000 new modern apprenticeship starts, which SDS has achieved in each of the last two years. SDS is also performing well against the Scottish Government’s other modern apprenticeship priorities, including improving achievement rates and maximising places for 16-19-year-olds and higher levels of apprenticeships. These are significant achievements, due to challenging economic circumstances and because SDS depends on employers’ demand for apprentices.
Between 2008/09 and 2012/13, the Scottish Government’s annual spending on apprenticeships, through SDS, increased from around £60 million to £75 million in real terms (ie, allowing for inflation). There are greater costs associated with achieving the Scottish Government’s apprenticeship priorities. This makes it important for SDS to continue to monitor the financial sustainability of meeting the 25,000 start target within current budget limits.
The Scottish Government’s 2007 skills strategy states the aim of modern apprenticeships is economic development, through enabling individuals to develop skills while in paid employment. The Scottish Government has set various priorities for modern apprenticeships but existing performance measures do not focus on long-term outcomes, such as sustainable employment. This means it is difficult to measure their long-term contribution to national outcomes. More specific long-term aims and objectives, along with information on their benefits and appropriate outcome measures, would make it easier to assess the extent to which modern apprenticeships provide value for money. It would also help direct funding in ways that offer the best value to individuals, employers and the economy.
SDS administers modern apprenticeships well although this is complex for various reasons, including the number of organisations involved and the uncertainty of employer demand. Administration of modern apprenticeships could be improved. For example, SDS’s contracting process is time-consuming and it could share more information with training providers about how it awards contracts. There is also scope to improve monitoring and quality assurance arrangements to ensure training is delivered to a high standard. The role of apprenticeship contribution rates in influencing employers’ recruitment plans is not clear. By understanding this better, SDS could direct funding to encourage more employers to take on apprentices.
We make a number of recommendations to help improve the administration of modern apprenticeships. The Scottish Government and SDS should consider these as part of their response to the findings of the Commission for Developing Scotland’s Young Workforce.