Industry experts have called on the government to abandon its high-profile target of achieving three million apprenticeship starts by 2020, after official statistics revealed that the number of apprenticeship starts in the most recent quarter fell 59 per cent year on year.
The Department for Education found that 48,000 people began an apprenticeship in England between May and July 2017, compared to the same quarter in 2015-16, when 117,800 apprenticeship starts were recorded. The data includes final full year apprenticeship figures for the 2016-17 academic year.
The dramatic fall in apprenticeship starts was not entirely unexpected – in October, an early statistical release of the same data suggested the fall might be even higher, at 61 per cent – but it has surprised some commentators who had assumed the renewed focus on apprenticeships triggered by the introduction of the apprenticeship levy in April 2017 would encourage uptake.
Multiple factors have been cited in explaining the latest figures, from the overall complexity of the levy system and the fact it places an onus on employers to organise training, to a peak in the number of apprenticeship starts before the digital system was introduced – a year-on-year comparison of the previous quarter (February to April) showed an increase of 47 per cent in the number of starts.
“Many people rushed to get their apprenticeships in place before the current changes came into effect earlier this year, which could explain why the decline looks so pronounced,” Elizabeth Crowley, skills adviser at the CIPD, told People Management.
“However, this is just one aspect of why starts have since collapsed compared to previous years. Government data suggests just 58 per cent of eligible businesses have signed up for a digital account [for spending levy funds], which leaves 42 per cent of levy-payers not signed up more than six months in. This raises the question of whether that 42 per cent are simply planning to write the levy off as a tax; previous data suggested just 18 per cent of organisations would do so.”
Jake Tween, head of apprenticeships at the ILM, said the slow uptake in apprenticeships could be attributed to businesses not understanding how to take advantage of the new system. “Whenever any new legislation is introduced, it takes time for those affected to get to grips with what the change means for them,” he said. “This is especially true when businesses have already such a full agenda. We’ve got to give employers time.”
The mood among many levy-paying employers has remained combative since the introduction of the new system, with reports that some had worked with providers to ‘fiddle the costs’ of training or offset some of their costs against existing training. At a conference in October, angry delegates slammed the 20 per cent off-the-job training requirements of the levy, describing the measure as ‘frankly impossible’ to achieve. And there have also been ongoing problems with the administrative details of some apprenticeship schemes – this week, The Sunday Times reported that more than 900 would-be apprentices for a new MBA scheme were being prevented from starting their courses because standards had not been agreed.
Abandoning the ambitious target of achieving three million apprenticeship starts by 2020 would allow both the government and employers to look at bringing positive reforms to the levy system, focusing on the quality of training over the quantity, experts said.
"We have made clear to the minister [skills and apprenticeships minister Anne Milton] and officials the short-term actions that are required,” said Mark Dawe, chief executive of the Association of Employers and Learning Providers.
“Firstly, there needs to be appropriate flexibility of off-the-job training. In addition, employers without levy funding should not be charged for training 16 to 24-year-old apprentices. Without these actions, we do not believe the government will reach its manifesto commitment."
Crowley added that the government should consider broadening the levy to embrace a programme of wider, flexible training for employers and organisations, instead of focusing solely on apprenticeship starts. “The government should abandon its three million target, and there should be a recognition that apprenticeships are not the only ways to upskill the workforce,” she said.
“Continuing to push funds that can only be spent on apprenticeships – particularly for smaller organisations – is not the training we need. [The CIPD] is pushing for the government to reform the levy into a more flexible training levy, so employers have the option to spend their levy funds on other forms of equally valuable workforce training, instead of eating into existing workforce training budgets.”