What happens when apprentices are made redundant

By Sarah Bloomfield, Fran Myers, and Kristen Reid

In the wake of grade compression in this year’s post-pandemic A level results, and alongside the continuing squeeze on the cost of living, a recent increase in applicant interest in degree apprenticeships as a different route to qualifications for school leavers is likely to be sustained.

As we know from both the Sutton Trust and UCAS, apprenticeship supply is not keeping up with demand, and more apprenticeship opportunities are being offered to experienced staff rather than to school leavers – leading to fierce competition for an already limited number of places. But supply is not the only challenge.

The elephant in the room is that many enthusiastic, existing apprentices are having to withdraw because they’ve been made redundant and no longer qualify for funding. Tweaking the apprenticeship levy could provide the tent pole for a win-win-win for apprentices, providers, and government alike.

More isn't enough

Ratcheting up the number of higher-level and degree apprenticeship places available seems a logical next step for UK economic recovery, particularly in light of figures cited by The Sunday Times of £4.3 billion of unused funds with the Treasury over five years (although statistics provided by the Department of Education to the House of Lords on 13 September appear to show an improved picture over the last two financial years).

However, concerns about applicant awareness of what is on offer, and the complexity and limited flexibility of the apprenticeship levy, provide two major stumbling blocks to enrolment and progression. The UCAS initiative to offer apprenticeship opportunities alongside traditional undergraduate degrees is one welcome step in generating more starts, but what about on-programme support?

Retaining apprentices has been beset by challenges, with national attrition rates standing at almost half of starts, leading DfE to set an aspiration of 67 per cent achievement by 2024-25. The situation is difficult for providers, as acknowledged by Amanda Spielman from Ofsted, who recently highlighted in her keynote to the Annual Apprenticeship Conference how some providers are cutting their programme provision due to economic unviability. However, the impact of these issues on retention that Spielman cites such as apprentices not being released for off-the-job training, or a variable quality of tuition from providers is only part of the picture. Research conducted by The Open University (OU) shows that more could be done with the levy for apprentices who are made redundant.

Insights on apprenticeship withdrawal

In a series of interviews conducted with Chartered Manager Degree Apprenticeship (CMDA) apprentices who had not completed their programme, OU researchers identified a number of factors specific to degree apprentices, over and above the usual reasons students drop out. Whereas traditional reasons that students withdraw include personal circumstances such as financial issues and caring responsibilities, the OU research found another set of factors related to apprentices’ employment situation.

Several of the apprentices in the OU research highlighted specific job change situations that affected their ability to complete, namely redundancy and resignation, but also internal promotions and moving to a new employer. Promotions should be celebratory events, but in these cases, they came tinged with regrets. For those apprentices experiencing redundancy, the situation was even more challenging. Being unable to complete through no fault of their own was highly frustrating. One participant called the lack of financial support after redundancy an 'elephant in the room', another expressed crushing disappointment after they had 'tried so hard and…spent hours and hours' but were defeated by the logistics of their personal employment circumstances.

A painful process

Whilst 2020 updates to regulations afford some government support for apprentices experiencing redundancy (in part to address COVID-related redundancy), it’s still a challenging situation for the apprentice. Funding is provided for 12 weeks following redundancy in the hope the apprentice can find an alternative employer. Apprenticeship students can also apply for funding to complete if they have fewer than 6 months left or have completed more than 75 per cent of their training. Nevertheless, one of the OU research participants highlighted 'the very painful process' of having to ask a new employer to support their existing apprenticeship.

With Government-commissioned IFF evaluations showing that the most common reason for apprentices not completing their qualifications was being fired or being made redundant (11 per cent), the current regulations still leave many dedicated and keen apprentices unable to complete their apprenticeship when both providers and government desperately need them to stay the course.

For some research participants, losing their apprenticeship funding meant their dreams of achieving a qualification evaporated. One of the luckier ones was able to self-fund and transfer their studies to complete a traditional qualification, but found the financial sting persisted, 'my blood still boils when I think of it'. However, not all apprentices are as fortunate. The apprenticeship is gainful employment, and for those who experience redundancy earlier than covered by current regulations, they can end up in double jeopardy.

Potential tweaks

One quick win to block the current penalty of a lost apprenticeship accompanying the red card of redundancy would be to tweak the policy to allow students to draw down from the levy as individuals to complete a degree. Redundant students could then complete a qualification rather than leaving empty handed, providers would be able to see students through to completion, and the government would realise its highly-skilled employment goals by making the most of existing funding capacity. Arguably, though this will add complexity to the calculation of provider achievement rates, it will go a long way towards addressing the double jeopardy redundant apprentices experience through no fault of their own.

As highlighted by the OU’s research findings on the impacts of redundancy on degree apprentices, it will be important for sector and government alike to consider the implications of scaling up apprenticeship provision as a cornerstone of future HE provision (Myers et al., 2023). Not only should policies emphasise increasing the supply of places, but they should also focus on protecting and securing student retention and completion. This will enable more young people to earn-whilst-they-learn, develop economically relevant skills and graduate without debt.

About the blog authors

Dr Sarah Bloomfield is a Lecturer in work-based learning in the Department of People and Organisations at The Open University.

Dr Fran Myers is a Lecturer in Management in the Department for People and Organisations at The Open University Business School. Her research interests include organisational and political history-making and storytelling and identity in the workplace (particularly digital identity work).