Former education secretaries from across the political divide have called on ministers to act after The Independent revealed that more than £1bn of taxpayers’ money was being used to fund masters-level courses for top executives.
One warned that part-subsiding MBAs for high earners raking in more than £100,000 a year “makes a nonsense” of the apprenticeship levy.
Over 55,000 executives from hundreds of large companies have received 100 per cent funding to take two postgraduate level apprenticeship standards that are equivalent to a master’s degree but badged as apprenticeships.
Experts say the courses are not what the scheme was designed for and mean young and new entrants to the labour market are losing out.
Former Tory education secretary Gavin Williamson called for the government to look at the levy “afresh” as funding MBAs was “not the spirit of what the apprenticeship levy was set up for”.
Former Labour education secretary Alan Johnson said the system should be reformed. “This makes a nonsense of the objectives of the levy. It was to help young people into work not help executives onto the gravy train,” he said.
The levy was launched with great fanfare by ministers in 2017. It charges larger businesses 0.5 per cent of their wage bill which they can use to recruit and train apprentices. Any of the levy that remains unspent after two years is returned to the Treasury.
But the number of entry-level apprenticeships, which are equivalent to five GSCE passes, have more than halved, from 53 per cent of the total five years ago to 24 per cent today.
Yet at the top end of the scale, an estimated £100m of the apprenticeship levy has been used to help fund top earners to study for an executive MBA.
The Independent first exposed how £300m of levy funding had been used to fund 21,000 senior leader apprenticeships in the five years to August 2022.
And we reported yesterday that an additional £700m has been used to fully fund more than 34,000 executives taking the accountancy or taxation professional standard. At £21,000 for each, this is the most expensive apprenticeship on the market.
The astonishing £1bn figure for these so-called level 7 courses has been extracted from government data by education thinktank EDSK and it means that the scale of the scandal of young people losing out as firms use the apprenticeship levy to bankroll training for top executives is more than three times worse than previously feared.
Mr Williamson said: “I think people do question the idea that the apprenticeship levy is being used to fund MBAs for some of the big banks. And feel that actually, that type of funding could be better and more effectively used through apprenticeship programmes that are going to deliver really high value for people ... [and] industry more broadly.”
He said that no one doubted the importance and value of MBAs “but it’s not the spirit of what the apprenticeship levy was set up for.”
He called on the government to review how the scheme is run. “As we look at how we make sure our apprenticeship system works the very best for both industry and young people, it certainly is something that we should be looking at afresh. Making sure that every pound spent as part of the apprenticeship levy is going to maximise the skills base in this country.”
He added: “I think people will just find it a little bit odd to think that is necessarily MBA programmes.”
The London Mayor and Ofsted chief have also waded into the controversy, with Sadiq Khan calling the apprenticeship levy an “appalling scheme not fit for purpose”. Amanda Spielman, chief of the education watchdog, said “relabelling management training as apprenticeships is bad practice”.
The Independent has contacted the Treasury and the Department for Education for comment.
