Group Training Associations and Apprenticeship Training Agencies

TUC Policy Briefing

Group Training Associations and Apprenticeship Training Agencies

• Background
• GTAs and ATAs
• Explanation of terms
• Funding for GTAs and ATAs in England
• Historical background
• Quality of GTAs
• GTA England
• Consultation with unions
• Unions' position on GTAs and ATAs
• Conclusion

Background

In January 2010 the TUC consulted affiliate unions on their experience of and views on Group Training Associations (GTAs) and Apprenticeship Training Agencies (ATAs). Background information on GTAs and ATAs, including definitions, was provided as well as a series of questions.

A Learning and Skills Policy Network meeting, chaired by Tom Wilson, Director of unionlearn, was held in February 2010 to discuss the issue in greater detail. Presentations were given by Scarlet Harris, Apprenticeships Policy and Campaigns Officer, TUC and David Sherlock, Chair of GTA England.

This paper outlines the definitions of GTAs (Group Training Associations) and ATAs (Apprenticeship Training Agencies), gives some background to the model and a summary of unions' views and experiences with regards to GTAs and ATAs.

GTAs and ATAs

As the number of apprenticeships has significantly grown in recent years, so has the interest in different models of training apprentices. The Group Training Association (GTA) model has generated a lot of interest and is being promoted by BIS and the National Apprenticeship Service.

While GTAs are not a new concept, they are seeing something of a renaissance. The TUC is seeking the experiences and views of affiliate unions on GTAs.

Explanation of terms

Definition of a GTA A Group Training Association (GTA) is a not for profit organisation providing support on accessing and managing training for a group of employers to encourage their involvement in Apprenticeships.

Definition of an ATA

An Apprenticeship Training Agency (ATA) is a not-for-profit organisation, which directly employs and manages individuals who undertake their apprenticeship with an approved Training Provider whilst being hired out to a 'host employer'. The ATA also co-ordinates the training activity for the apprenticeship which is delivered though LSC contracted training providers.

Funding for GTAs and ATAs in England

In 2009 in was announced that twelve organisations won a share of £7m of Government funding to set up new Apprenticeship Training Associations (ATAs) and Group Training Associations (GTAs). These include four ATAs in the London region.

The organisations which successfully bid for the funding are listed below:

Historical background

GTAs

Group Training Associations were originally set up in the 1960s to train on behalf of groups of employers, using funds contributed by them through a statutory training levy and with assistance from the relevant Industry Training Boards (ITBs) to purchase capital and equipment. Whilst GTAs have evolved over time in many ways including coverage of a much wider sector spectrum, they can still be defined by their core characteristics:

• A training organisation governed by representatives of (usually subscribing) employers
• A company limited by guarantee and registered charity reinvesting all surpluses
• A training provider whose curriculum is centred on apprenticeship for engineering, construction and manufacturing

ATAs

ATAs are a newer model and are attracting significant Government funding. The London Apprenticeship Company (LAC) is an example of an ATA.

The National Apprenticeship Service announced in 2009 that 'we will create up to 10 new Apprenticeship training associations across the country by the end of 2009, with the potential to deliver up to 15,000 Apprenticeship places by 2014/15. This will develop new and innovative approaches drawing on the Australian model, where apprentices are employed by a recruitment agency and hired out to host businesses.'[1]

The new funding available for ATAs is aimed at creating apprenticeships in industries considered to be vital for the country's economic growth, including environmental, creative, engineering, manufacturing, logistics and business administration.

Applying the Australian model in England

The Government has based the ATA model on the Australian Group Apprenticeship Scheme model. Group Apprenticeship Schemes are the largest employers of apprentices in Australia, with over 40,000 apprentices employed per year which is around 10% of the national total.

The apprentices are employed by the Training Association and 'hired out' as a flexible workforce to other employers, known as 'host companies' for the work-based element of their apprenticeship.

Host companies pay the Training Association a fee for the hire of the apprentice, which comprises their salary plus a service charge which covers the management costs of employing and supporting the apprentice.

The Training Agency takes on most of the administration, dealing with the payroll, support and supervision of the apprentice and being their legal employer.

• This approach is popular with employers, particularly SMEs, as they can 'hand back' the apprentice with two weeks' notice. There is the opportunity to switch to another host company - which, it is argued, reduces the perception of risk for both host and apprentice.

Quality of GTAs

The last comprehensive review of training quality in GTAs was carried out by the Adult Learning Inspectorate (ALI) in 2002. ALI had identified 70 GTAs then.

Its forerunner, the Training Standards Council (TSC) had inspected and graded 60 and, by October 2002 when its survey was conducted, ALI had inspected 20 (some repeats). The ALI found that 83 per cent of GTAs delivered training in engineering (the best apprenticeship discipline across all LSC-funded provision) which was satisfactory or better, compared with 66 per cent among engineering providers generally. The gap is statistically significant.

The management of GTAs was regarded as particularly good by ALI inspectors. Three-quarters of GTAs achieved grades for leadership and management which were satisfactory or better, compared with 47 per cent across all providers at that time; again a statistically significant advantage for GTAs. Among GTAs inspected by the ALI in 2001-02, 70 per cent achieved satisfactory or better grades for quality assurance, compared with an average of only 36 per cent across all providers.

More recent comparative data is not readily available. Of the 34 GTAs which have inspection results published on the Ofsted website, only one has any provision which was found unsatisfactory. That is under 3 per cent of the GTAs, well below the national average for work-based providers. Indeed, among 136 published grades for GTAs, only three grades were unsatisfactory and 73 grades were good or outstanding. Twenty-five of these 34 GTAs have been inspected since January 2006 and four have been inspected in the past year, one of which was awarded grade 1 across the board. These results give a large measure of assurance that the high quality of the GTAs, as a group, has been maintained.

While there is no data available for the quality of ATAs, data from Australia indicates that the Australian GTO model (upon which the ATA is based) offers higher quality standards and completion rates than directly employed apprenticeship schemes.

GTA England

An umbrella organisation for GTAs in England was created in 2009, called GTA England. GTA England aims to raise the profile of GTAs, seek funding for GTAs and to devise standards for GTAs. The organisation is supported in principle by the National Apprenticeships Service (NAS) and by the Association of Learning Providers (ALP).

Consultation with unions

The following questions were asked of unions in relation to GTAs and ATAs:

• Do you know of/have experience of GTAs in your region/sector?
• What do you think the implications are for an apprentice employed through a GTA in terms of their chances of obtaining employment after their apprenticeship (versus an apprentice directly employed by an employer)?
• Do you have concerns about how GTAs operate in your region/sector? If so, what are your concerns?
• Does your union have a policy line/view on GTAs and/or ATAs?
• Do you think apprentices pay and conditions; or the quality of the training they receive, would be adversely affected by a GTA, as compared to the normal direct employment route?

Unions' position on GTAs and ATAs

Both the consultation exercise and the LSPN meeting in early 2010 pointed towards a broad consensus amongst those unions which participated in the exercise in terms of the concerns raised about GTAs and ATAs.

Many unions have experience of working with GTAs and similar training organisations and most unions recognised the benefits of GTAs.

GTAs have operated successfully for many years, particularly in the construction and engineering sectors, often with trade union involvement and support. Unite point to the example of JTL (below) which shows how successful such a union/employer/provider partnership can be.

Unite and JTL - a successful training partnership JTL is a partnership of Employers and Unite the Union established for the benefit of young people and the industry, with charitable status, and therefore any surplus is re-invested into further skills training at no cost to the Government, learner or employer. JTL has over 12,000 apprentices in training at any one time, across 2,500 employers in England and Wales. JTL is the largest provider of Advanced Apprenticeships in the UK and is larger than any other industry GTA Group. It provides over 70% of all apprenticeships in Building Services Engineering and can boast an impressive 84% success rate.

However, unions are more wary of ATAs and the potential problems posed by using employment agencies for training purposes.

The key points raised by unions are as follows:

Unions as stakeholders

UCU in particular raised the issue of governance and how unions could take an active role on the boards of GTAs.

Unite also pointed to the model of JTL in the construction sector which operates much like a GTA but with the unions acting as a major stakeholder and social partner.

Unite suggest that, 'Trade Union involvement at board level on the associations would be welcome, with the most representative unions and employers associations within industries taking the relevant positions, not just a 'free for all' approach, board members should have a working background in the disciplines of those apprenticeships they claim to represent.'

Implications for quality of training

Some unions expressed concern about the impact of GTAs and ATAs on the quality of training. The information on quality audits of GTAs above seems to indicate that these concerns may be unfounded. However, there is no data available yet regarding the quality of training provided by ATAs.

The quality of the apprenticeship is likely to be dictated both by the training organisation and the employer/'host employer'. Where the employer has a history of providing training and/or apprenticeships they are more likely to work effectively with the GTA/ATA to ensure high quality training for the apprentice.

As Unite succinctly explained in their response to the TUC's call for information: 'Involvement with ATAs should not be used by employers with no track record of commitment to apprenticeships to simply 'tick' procurement requirement boxes in tenders to win work when it suits them, to the detriment of the good employers who have systematically engaged apprentices directly year on year through good times and bad.'

Implications for pay and conditions

Concern was raised by several unions, particularly those in sectors where national sectoral pay agreements exist, such as Unite in the construction sector, that ATAs - as the direct employers of apprentices - would not necessarily comply with sectoral pay norms and would be able to undercut industry pay rates in much the same way as employment agencies.

Unison also voiced the concern that, due to the lack of union involvement in GTAs and ATAs, pay rates are likely to be set at the national minimum.

Implications for security of employment for apprentices

There was a general consensus that ATAs - which effectively operate as employment agencies, employing apprentices directly and hiring them out to other employers - pose a serious threat to apprentices' security of employment. While there are clearly benefits in offering an apprentice experience of a range of workplaces and there are obvious benefits to the employers who minimise risk and commitment by taking on apprentices as agency workers, there are clear disadvantages for the apprentice in terms of job security.

The possibility of an apprentice being passed around several different employers - not necessarily to provide a breadth of experience but rather because no employers were prepared to commit to the duration of the apprenticeship course - and being 'handed back' to the ATA with only two weeks' notice, is a serious cause for concern for unions.

Unison commented that 'we fear that ATAs would not by definition be able to give permanent job guarantees on completion. Also public authorities could use a succession of ATA trainees as a means of substituting for permanent jobs.'

Unite noted that, '[The] experience [provided by a GTA/ATA] should make such an apprentice an attractive potential employee when they successfully complete. Furthermore, their getting to know multiple employers would in theory expand their own network and future employment prospects.

However, conversely, apprentices employed directly by one employer have the opportunity to build a lasting relationship and cultivate a sense of loyalty between themselves and the company, which can obviously lead to a long term job, and good career prospects within that organisation, leading to career development, promotion etc.'

Implications for union recruitment and organising

Perhaps the greatest concern for all unions with regard to GTAs and, in particular, ATAs, is that they pose a potential barrier to union recruitment and organising. Whereas many unionised workplaces will allow the union access to apprentices on their induction training, it is less likely that unions would gain access to GTAs or ATAs.

GTAs are less problematic as the apprentice would not be employed by the GTA so would presumably still have a workplace induction with their employer and the same opportunities to join a union as any other employee.

However, where apprentices are directly employed by an ATA it will be difficult for unions to identify where there are new apprentices starting in their sector.

The TUC has come across one example of union involvement in ATAs but, on the whole, it is anticipated that the employment agency structure of ATAs will make it more difficult for unions to organise and recruit effectively.

One union official reported that 'GTAs do not recognise my union and will do all they can to keep unions out of their business'

Sectoral and geographical mapping of ATAs is crucial to enable unions to identify where new apprentices might be and to organise effectively. Where unions can forge working relationships with GTAs and ATAs or even secure a union place on the board, the union's ability to organise new apprentices will inevitably be improved.

Status of ATAs as employment agencies and implications with regard to the Agency Workers' Directive

At the Learning and Skills Policy Network meeting in February 2010, the question of whether or not ATAs would be affected by the Agency Workers' Directive was raised.

The TUC has sought clarification from the Employment Agency Standards Inspectorate on whether or not ATAs are considered to be employment agencies. The EAS is aware of ATAs and has already inspected some.

Their advice to the TUC is that Apprenticeship Training Agencies (ATAs) do fall within the definition provided by Section 13(2) (the definition of an employment agency) and Section 13(3) (the definition of an employment business) of the Employment Agencies Act 1973. GTAs fall into within the definition of 13 (2), an employment agency. Confusingly, an 'employment business' refers to what would be called an employment agency in common parlance.

The following definitions are provided by BusinessLink:

'An 'employment agency' finds work for work-seekers who are employed and paid by employers. This is often referred to as 'permanent employment' as once the worker has been taken on, they are an employee of the company they are working for'

'An 'employment business' employs or engages a work-seeker under a contract who in turn works under the supervision of another person. This is known as 'temporary agency work' or 'temping'. The workers under these arrangements will be paid by the agency rather than by the company they are supplied to'

This means that the Conduct of Employment Agency and Employment Business Regulations applies to both GTAs and ATAs. Although the business activities of GTAs and ATAs fall within Employment Agency Standards inspectorate's remit, those run by local authorities, universities and educational establishment and also charities are likely to fall within the exemptions provided by Section 13.

The TUC and the Employment Agency Standards inspectorate estimate that the majority of GTAs and ATAs are a mixture of job boards, training providers and business promoters, all of which do fall within the scope of EAS.

Implications for FE funding

Both Unison and UCU voiced concern about how the creation of GTAs and ATAs might impact upon both FE college funding and also tutors' terms and conditions.

Unison noted that, 'FE Colleges are under particular budget pressure with hundreds of millions of cuts and 7,000 job losses predicted. We are concerned that GTA and ATAs suck up public funds unnecessarily and channel funds away from recognised training providers at FE Colleges who have staff and infrastructure already in place.'

UCU questioned whether GTAs and ATAs might be used to downgrade teaching positions and to employ tutors at a lower rate of pay than they would receive for comparable work in an FE college.

Conclusion

The TUC recognises the benefits of the group training model, particularly to SMEs, as it affords additional flexibility to the employer as well as an opportunity to pool resources. The GTA model may also offer benefits to apprentices in terms of offering a breadth of experience, contacts, and training opportunities which would not be possible with just one employer.

In spite of some unions' concerns, Ofsted inspections indicate that GTAs actually offer high standards of training and have higher rates of completion than non-GTA apprenticeships.

However, ATAs are potentially more problematic for trade unions. The fact that ATAs involve an apprentice losing their direct employment link with an employer and effectively turns the apprentice into an agency worker is a cause for concern for the TUC and affiliate unions. There are clear implications both for the job security and employment prospects of the apprentice as well as the ability of unions to organise and bargain effectively.

It is essential that unions are aware of GTAs and ATAs operating in their sectors and are able to gain access to apprentices during their induction with the GTA/ATA.

The TUC would like to see greater union involvement in the governance of GTAs. Where unions are actively involved in the governance of GTAs and have a social partner/stakeholder relationship, they are more likely to successfully meet the needs of both the apprentice and the employer. The TUC has raised the possibility of trade union representation on the board of the newly formed umbrella organisation for GTAs, GTA England and would welcome union representation on boards of individual GTAs.

The removal of the National Minimum Wage exemption for apprentices will afford some protection to apprentices employed by ATAs in terms of safeguarding pay. However, the TUC shares the concerns of unions such as Unite who believe that ATAs may circumvent national collective pay agreements.

The TUC also welcomes the fact that the Employment Agencies Standards Inspectorate is closely monitoring ATAs.

The TUC's priorities with regard to apprenticeships are maintaining quality, reducing the gender pay gap, increasing equality of opportunity, promoting progression routes, in particular for young women from Level 2 to Level 3 and beyond, improving apprentices' pay and conditions, and promoting union organisation of apprentices and collective bargaining. The TUC maintains that ideally an apprentice should be employed directly by their employer, rather than an agency, and should, wherever possible, lead to employment upon completion of the apprenticeship.

GTAs and ATAs may potentially represent a means to improve quality and possibly equality of opportunity. The TUC will continue seek greater union involvement in GTAs and possibly ATAs and to monitor the extent to which the GTA and ATA model is compatible with the TUC's aims of promoting union organisation of apprentices and improving apprentices' pay and conditions.

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