What’s the real cost of training delivery in 2022?

In July, inflation in the UK increased to 9.4% – significantly higher than the 4.4% predicted in the Autumn Budget. These rising costs are having a huge knock-on impact on training delivery, from staff retention to the quality of delivery.

High inflation rates are hitting the apprenticeship and training sector hard. While most industries are struggling with increased costs, the training sector finds itself uniquely stuck between a rock and a hard place.

Since training providers rely largely on fixed rates of government funding, there isn’t the same leeway as other sectors to simply raise prices in line with inflation. What’s more, funding was already stagnating: a report last year estimated funding for adult learning and apprenticeships would be 15% below 2010 levels by 2025.

It’s likely that inflation will affect training providers well into next year too. The Learning and Work Institute predicted that it could wipe out up to £850 million of the value of skills funding in England over the next three years. This could put up to 250,000 learning places at risk or reduce the quality of learning.

We look at some of the biggest challenges for training providers right now and what factors are affecting training costs in 2022.

How rising costs are leading to a trainer exodus

Inflation is also having a big impact on trainers who need to travel for work. Fuel costs have soared, largely driven by the war in Ukraine. The average petrol price hit 191.43p per litre in July, meaning it cost over £100 to fill a family-sized car.

These costs are higher than trainers can claim, leaving many people out of pocket. It’s sparked a conversation between a lot of trainers and training providers about the need for face-to-face delivery in the current climate.

The Ofsted requirement is that training providers choose the method of delivery that suits learners best. This could be remote, face-to-face or a blended approach – what matters is that they can provide a clear rationale behind the choice.

Many trainers learnt to deliver high-quality training remotely during the pandemic, and would argue in favour of a remote or blended approach. They’re comfortable with the equipment and well-versed in delivering engaging content. It’s no surprise that they feel that in-person delivery isn’t worth the sacrifice to their own personal finances.

For training providers keen to return to the old ways of working – exclusively face-to-face delivery – we’re seeing an exodus of trainers. While fuel costs are certainly a factor, it’s likely there are also wider trends at play:

• The desire for greater flexibility after the pandemic
• An increased focus on personal wellbeing and work-life balance
• The lingering impact of the “Great Resignation” movement

The staffing crisis could hit the quality of provision

So where does this leave training providers? Many organisations are already struggling with higher energy bills and operating costs, but declining staff retention rates are creating new problems.

This year, we’ve seen more job vacancies than unemployed people in the UK – the first time this has happened since records began. It’s placing huge pressure on providers to compete for a limited pool of skilled staff who can deliver high-quality training.

There are also concerns that the staffing crisis will hit the quality of provision. At the recent Association of Employment and Learning Providers (AELP) conference, Ofsted’s Chief Inspector Amanda Spielman highlighted several issues from recent inspections:

“I want to say something about what we are seeing on inspection and during our monitoring visits to new providers. Of significant concern are the staffing difficulties that many of you are having, especially in relation to recruiting and retaining specialist teachers and trainers, including in subjects like English and Maths. We are also seeing fewer learners achieving revised functional skills qualification,” she said.

She described staffing difficulties as “absorbing leaders’ time”, which was drawing attention and focus away from long-term planning around the learner experience. It’s reasonable to expect that this could have an impact on some providers’ Ofsted ratings later this year.

What’s next for training providers?

Looking forward, it’s clear that a better system is needed to ensure funding rates reflect the true cost of training delivery. An annual review would help to prevent stagnation and take inflation into account.

Training providers will also be hoping for a greater level of business support from the next Prime Minister. If the cost of living remains high, organisations will face a steep rise in energy bills over the winter months. Grants or tax cuts would help to alleviate some of the pressure.

Finally, we can expect the Institute for Apprenticeships and Technical Education (IfATE) to release its apprenticeships funding rate review early next year.

The IfATE aims to ensure that apprenticeships are funded appropriately across all sectors and that a more transparent model is in place for recommending funding bands. The 12-month pilot for the new funding model has started with a small number of apprenticeships and will be completed January 2023.

How have your training costs changed over the last 12 months? What change would you like to see most in the sector? Tag us on LinkedIn at @budsystemslimited and let us know.