Will further education (FE) loans damage the government's ambitions for apprenticeships, asks Graham Hoyle OBE, chief executive of the Association of Employment and Learning Providers (AELP).
Independent training providers have not opposed the introduction of 24+ Advanced Learner Loans but when improving skills in the workplace is seen as critical to supporting economic recovery, ministers will have to monitor their introduction very closely and be ready to act if learner numbers start to fall significantly.
First and foremost loans create a tension with ministers' big ambitions for further growth in advanced and higher apprenticeships. Many training providers believe that their introduction will have a detrimental impact on the take-up of higher apprenticeships by those aged 24 and over because these programmes incur higher fees than single vocational qualifications as they contain more than one element of learning.
The publicly funded skills system involves a significant level of subcontracted training, often between large colleges as the lead contractor and local training providers as the subcontractors. As the FE loans facility will be constructed around the lead contractors, smaller providers have been concerned that they will not have 'line of sight' of the system to access loans for their learners. Already the Skills Funding Agency has recognised this concern and is seeking to develop a mechanism that will remove this potential barrier while also looking at ways to enable supply chain providers to maintain access to the advanced learning 24+ market in the longer term.
There will undoubtedly be a challenge for learning provider staff on the front line to be well informed about the loans process and to be able to direct prospective learners to the appropriate sources of financial advice so loans applications can be made in a timely and accurate fashion. This will require investment in CPD at a time when many sectors will see their providers operating under reduced funding rates.
Other matters require clarification, such as how the facility loan offer will be calculated for each provider. Training providers take on apprentices and other trainees in the work place all the year round and therefore reassurance is needed that from 2013, the Treasury's loans allocation will not be used up by mainstream FE students during the September/October enrolment season, thereby threatening the potential take up by higher level apprentices.
Major concern about VAT on learning
Another large concern has been the real possibility that VAT will be imposed on loans taken out in respect of learning with a private training provider. As independent providers deliver in excess of 70% of apprenticeships in England, the potential adverse impact on the government's flagship skills programme cannot be underestimated as learners will be tempted to opt for less expensive alternative courses or opt out altogether. Ministers accept that this is not scaremongering and are engaged with the Treasury and HMRC to try and come up with a solution.
Finally it is important to remember that while the system will operate like the loans system for university tuition fees, we are talking about a very different cohort of learners, many of who are not living at home with their parents. Most of the individuals affected will be well into their working lives, paying rent or a mortgage or saving to buy a property. Some will already have families of their own. They will see gaining a new qualification as means of progressing in their career but the cost might deter them from pursuing the idea. The Association of Employment and Learning Providers is hearing real concerns from some sectors, especially care and other service occupations, that older cohorts will be especially be put off by the withdrawal of state funding from August 2013.
Independent training providers will be watching with interest the introduction of 24+ Advanced Learner Loans. AELP has always supported the concept but recognises that any ill thought out introduction could prove counter-productive and disadvantage many learners benefiting from the existing arrangements.
Graham Hoyle OBE is chief executive of the Association of Employment and Learning Providers (www.aelp.org.uk)