Apprenticeships are contributing an increasing amount to the economy, according to new official statistics which suggest the number of starts may be gradually increasing.
The first Further Education (FE) Skills Index released by the government showed the value added to the economy from apprenticeships has been increasing year-on-year, rising 10 per cent between 2012/13 and 2016/17.
The data reports a notable spike in 2017/18, following an increase in the number of higher-level and advanced apprenticeships being introduced by businesses after the introduction of the apprenticeship levy.
However, the statistics also show the overall value added by the further education sector – measured by estimating the ‘value added’ for adult learners and apprentices through increased earnings and productivity – has declined over the last six years.
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The overall index has dropped by around a quarter since 2012/13, driven predominantly by a decline in value from classroom-based learning.
Apprenticeships accounted for 58 per cent of the total added value in the FE sector in 2017/18, compared to 36 per cent in 2012/2013 – which Lizzie Crowley, skills advisor at the CIPD, attributed in part to reforms such as the introduction of apprenticeship standards driving out low-quality provision and facilitating shifts to higher-level training.
However, she expressed concern over the consistent decline in added value from other forms of adult learning, with classroom-based qualifications falling by 2 per cent in 2017/18.
“We’ve seen a drop in the number of people taking classroom-based learning as the result of reductions to FE funding in the last decade, so we can’t ignore the needs of the rest of this sector,” she told People Management.
“This data is good news for apprenticeships, and we do know they provide better than average returns to the individuals, but we also need to be creating a really vibrant FE sector that facilitates adult, lifelong learning, and the data shows we are a long way from having that provision in place.”
Lady Cobham, director general of the 5% Club, added that the increases in higher-level degree apprenticeships masked 'continually declining' numbers of overall apprenticeships in the UK.
"Nearly half of our members struggled to find the further education training they needed last year in order to be able to take on the apprentices they needed," she told People Management.
"The education system needs urgent reform if it is to enable UK organisations to meet the huge skills gap they face to compete in global markets. Colleges and further education establishments must reach out to employers to secure new funding streams and provide the skills 21st century employers need."
The latest round of provisional start data for apprenticeships compiled in February 2019 reported 25,300 new apprenticeship starts, up 16 per cent on the previous year. This indicates an increase in apprenticeship take-up, despite starts remaining 18 per cent lower than the 2016/17 reporting period before the levy was introduced.
In total, there were 256,300 apprenticeships starts between August 2018 and February 2019, up from 232,700 over the same period in 2017/18 but still lower than before the levy was introduced.
Mark Dawe, chief executive of the Association of Employment and Learning Providers (AELP), reiterated the need for a funding review of the programme, and fresh provisions for small businesses.
“[We] still believe that introducing the levy was right, but starts being over a third down on pre-levy levels show that the Chancellor was also right to call for a fundamental review of how the funding system is working,” he said.
“Increasing funding available for SMEs as major providers of level 2 and 3 apprenticeships is the biggest priority, and the government must use the [forthcoming] Spending Review to restore the funding for them that was there prior to the levy.”
Crowley added there remained a need to scrutinise who was benefiting from the apprenticeship system, due to employers ‘rebadging’ existing training provisions.
“We’ve seen a worsening trend of apprenticeships not going to the young people broadly believed to be the recipients of this programme,” she said.
“Some of the evidence from Ofsted and the National Audit Office suggests organisations are facilitating the replacement of employer training schemes with apprenticeships, which doesn’t add value to the economy – so it’s too early to celebrate just yet.”