How Universities end up with government ban on using taxpayer money to fund MBAs for top executives while 100,000 young people miss out

Using taxpayer money to partially fund MBA courses for top executives earning six-figure salaries is widespread with more than half a dozen universities offering the option on their websites, a survey by The independent can reveal.

We can also put a number on the fall in the number of under-25s starting apprenticeships, which has plummeted by more than 100,000 – from 285,280 in 2015/16 to 183,850 in 2021/22.

Apprenticeship training providers who support young people at the start of their careers reacted with dismay to our findings, calling it “absolutely disappointing” that the apprenticeship levy should be “abused” at the expense of young people who need it most, and said the scheme needs major overhaul.

The independent he reported how £100m of the levy was used to subsidize high-flyers, many of whom earn more than £100,000 a year, to get their Masters in Business Administration, despite the government’s attempt to scrap it two years ago. We focused on two leading business schools in the UK, Henley Business School and Cranfield Business School.

The Register of Apprenticeship Education Providers includes over 60 universities and today we can reveal that at least half a dozen of them offer Executive MBAs ‘partly funded’ by the Levy on their websites. They include the University of Birmingham, Loughborough University, University of Portsmouth, Teesside University, Hult Ashridge Business School and University of Strathclyde Business School. Some explain how they have tailored the Senior Leadership Apprenticeship+MBA program to fit government apprenticeship regulations, effectively gaming the system to “allow employers to use government-made funding”.

The University of Birmingham is offering a part-time ‘Level 7 MBA Apprenticeship’ from March to November and is offering the carrot to prospective applicants saying ‘there will be no cost to the student’ for the first part of the program which is fully paid for by the Levy Apprenticeship. An additional cost of £7,000 is charged for the final 60 MBA credits, to be funded by the employer or the individual. Their website makes it clear that they are targeting “leaders with global ambitions”.

Loughborough University makes a similar offer, boasting on its website that “the 3-year Loughborough Executive MBA is designed to also meet the requirements of the Level 7 Senior Leadership Apprenticeship” and that “this enables applicants and their employers to use the Apprenticeship Levy to partially finance the MBA programme’. They specify that £14,000 is funded through the levy with individuals paying in at £9,600 – although bursaries are available to reduce the final fee by up to 40 per cent.

At the University of Strathclyde Business School, which has a top-10 ranking in the UK and where the average candidate salary is £135,000 according to the FT business school rankings, their MBA program is delivered “in accordance with the regulations for Apprenticeships”, allowing “employers to use funding made available by the government”.

But groups training apprentices at the other end of the age and experience spectrum said they were horrified by this use of the levy.

Duro Oye, chief executive of 2020 Change, a London-based group focused on the education of young black and minority ethnic apprentices under the age of 25, said: “I am shocked by these recent statistics. It is wrong to use the apprenticeship levy to subsidize well-paid executives, especially as the number of under-25s benefiting from the levy is 100,000 fewer than six years ago. The whole point of the levy was to help young people into the workforce and tackle inequality and improve social mobility. It is clear that the system does not achieve this. Something has to be done”.

Diane Betts, Chief Executive of apprenticeship training provider City Gateway, said: “The fact that the levy is being used to subsidize well-paid executives to get their MBAs is shocking and completely heartbreaking. Alongside a 53 per cent fall in the number of Level 2 apprenticeships since 2017 and a 36 per cent fall in the number of under-25s starting apprenticeships, this shows a further widening of the gap between the haves and have-nots. He feels that the system is being abused and that the people who are suffering are the people the system was created to support. We want to see tighter restrictions on how levy funding is limited with a greater focus on lower entry apprenticeships.”

Jane Hickie, chief executive for the Association of Employment and Learning Providers, which represents around 800 organisations, said: “We know that better skills systems around the world are employer-led, so it’s important to retain a person for all ages . level apprenticeship system, but we need to do more to encourage better uptake of apprenticeships at entry level and among young people. This means more government support in declining areas, for example through easier access to the apprenticeship scheme for smaller employers, targeted incentives and the availability of a full range of Level 2 apprenticeships.’

Leave a Comment