Throwing the baby out with the bathwater, though a rather grizzly image, sums up what may happen to level 7 (L7) accounting apprenticeships as the government takes aim at a system it deems not fit for purpose.
Last year, the government launched Skills England, a body tasked with plugging the country’s skills gap. Part of this is addressing the apprenticeship system, seeking to ‘rebalance’ it in favour of younger people and limiting or cutting funding for the most advanced training.
47% of ACCA apprentices come from homes in the 50% most deprived areas
Employer spending on training has been steadily declining over the past decade, according to the government. But cutting funding to develop advanced skills in a profession as vital as accountancy – which is already struggling with a deepening skills shortage at a time when training budgets are likely to be strained further as businesses face rising costs – seems out of step with an economic growth mandate.
Early adopter
The accountancy sector was an early adopter of apprenticeships due to the need to get more talent into the profession. It’s one of the few sectors in the economy to offer a full range of options from L2 to L7, enabling young people to progress far into the profession.
L7 is equivalent to a master’s degree and aimed at senior leadership training, which can include MBAs and advanced professional qualifications, such as ACCA (see box). It’s a pathway for young people to become members of chartered accountancy bodies, with over 70% of learners starting at age 24 or below, totalling around 7,000 young people per year.
‘Training accountants isn’t cheap, so many organisations have used L7 funding’
Around 73% of Level 7 apprentices in the accountancy sector start the programme at age 24 or younger to train in early-career roles, making Level 7 a critical career entry route for ambitious young people. Of those learners, 64% progressed to L7 apprenticeships with no prior higher education qualifications.
Many school leavers undertake accounting apprenticeships at L3 and L4, but as Rob Alder, ACCA’s head of apprenticeships and relationships, points out, people will hit a wall when they want to pursue membership and there is no company or government support. According to the Indices of Multiple Deprivation, 47% of ACCA apprentices come from homes in the 50% most deprived areas
‘Training accountants isn’t cheap, so many organisations have used L7 funding, particularly given already-under-pressure training budgets,’ he says. ‘Nowhere will this be felt more keenly than in the public sector, SMEs and small to medium-sized practices.’
ACCA is lobbying through a number of channels, including the Professional and Business Services Council, the IfATE Trailblazer group and directly with government departments and all-party parliamentary groups.
Uncertain paths
News of the potential cuts has come as ‘a blow’ to Leeds-based practice Kirk Newsholme. Director Jill Wright and development manager Amy Carter say they could see ‘the panic in our L3 progression learners’ faces and the uncertainty this meant for them over their progression within our firm and their study’.
Prior to L7 apprenticeships, PJCO in West Sussex would hire at most two graduates per year, some years just one. Since L7, the firm has hired four starters a year, while also extending the L3 and L4 scheme to school leavers.
‘This is essentially a degree apprenticeship that we’ve built for these young people,’ says partner Chloe Britnell ACCA. ‘I’m absolutely certain that such a change to funding would not only restrict the number of individuals to whom we can offer these opportunities, but our degree apprenticeship route will effectively be restricted – if not stopped entirely.
‘It’s vital for our business plans, growth and our brand that L7 continues’
‘It’s vital for our business plans, growth and our brand that L7 continues,’ she adds. ‘This is not just simply to benefit PJCO, but our entire ethos is to hire young people who just want an opportunity and a chance. We feel that our apprenticeships are a place where young people can become an integral part of the small business advisory team that every ambitious business owner wants on their side.’
Knowledge gaps
Wright mentions similar concerns, saying that as the firm strives to maintain a high level of compliance and advisory work, without being trained to L7, gaps in knowledge become apparent and it would become difficult to maintain the same level of service.
‘Skills England could consider a banding system in which the most talent-starved sectors receive the most funding’
‘We currently hold the “chartered” status as a firm, but would it feel morally right for us to hold and promote such a status knowing that future apprentices might not be qualifying as chartered or certified accountants?’ she asks.
Until an official announcement is made, rumours will circulate – some provoking hope, such as ring-fencing funding for professions and sectors with the keenest skills shortages.
‘For instance, Skills England could consider a banding system in which the smallest and most talent-starved sectors receive the most funding versus larger, talent-heavy conglomerates, who would receive less,’ suggests Vipul Sheth, MD of accountancy and outsourcing specialists Advancetrack.
‘The focus should be on strengthening – not restricting – access to the profession, allowing for a clear route to attract younger talent into the sector, without the need to spend thousands of pounds in university fees,’ he says.
Beyond rumours, however, it’s not looking hopeful for L7 funding.
Apprenticeship equivalence
Level 2: GCSE
Level 3: A level
Level 4: higher national certificate (HNC)/ACCA Accounting Technician
Level 5: higher national diploma (HND)
Level 6: degree
Level 7: master’s degree/ACCA qualification
