Adult apprenticeships good value for money, says NAO | Public Finance — official CIPFA magazine

http://www.publicfinance.co.uk/news/2012/02/adult-apprenticeships-good-value-for-money-says-nao/

Adult apprenticeships good value for money, says NAO

Adult apprenticeships provide a good return for the public money invested in them, but not as good as the government claims, auditors have said.

An examination by the National Audit Office found that each £1 of public money spent on the work-based training schemes produced an average economic return of £18. This compares with £28 estimated by the Department for Business, Innovation and Skills.

The difference is explained in how the department and the NAO assessed the potential impact of apprenticeships on workforce productivity.

In the auditors’ view, more data is needed to determine the full effect. They said the department had yet to assess ‘additionality’ – how far public money results in training that would not otherwise have taken place.

They added: ‘The department assumes that, for economic returns to apprenticeships, all public funding achieves additionality, but lacks data to support this; therefore any reduction in additionality would result in an equivalent reduction in the economic returns.’

The department has commissioned work on apprenticeships and additionality and expects to know the results in the early part of this year.

The NAO found a 140% increase in the total number of apprenticeship places between 2006/07 and 2010/11. Last year, the cost of the programme was £1.2bn, including £451m for adult apprentices.

In 2010, 5% of employers employed an apprentice, and the vast majority of these (86%) said vocational qualifications improved their business performance.

Both apprentices and inspectors were positive about the programme, with 91% of apprentices saying they were satisfied with the training they were receiving.

Despite this, NAO head Amyas Morse said the department should ‘set its sights higher’ to get better value from the adult apprenticeship programme.

‘It needs to target resources more effectively; confirm the training provided is in addition to what would have been provided without public support; and make sure that the funding system is informed by robust information on the cost of delivery,’ he said.

The Public Accounts Committee will be following up the NAO’s conclusions in the coming weeks. Chair Margaret Hodge said: ‘We will want to know how the department is making sure it targets its resources towards those areas and qualifications that have the most impact on the economy.’

Paul Champion
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