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New figures published by the Department of Education show that while all-age Government funded apprenticeship participation has increased to the highest number on record, apprenticeship starts and participation in Government funded adult (19+) further education has decreased – and the end of the academic year showed a steep decline in apprenticeship numbers.

 

Apprenticeships Missing Their Target

The statistics from the Further Education and Skills in England report show that all age participation in Government funded apprenticeships increased to 908,700 in the 2016/17 academic year, from 899,400 in 2015/16 – the highest number on record.

However, there was a deeply concerning 59% drop in the number of apprenticeships in the last 3 months of the academic year and apprenticeship starts were down 2.8% in the last academic year overall, with just 494,900 apprenticeship starts in 2016/17 compared to 509,400 in 2015/16. And while there have been increases in both advanced and higher-level apprenticeships, there were fewer starts on intermediate level apprenticeships. In the last 3 months of the academic year, Intermediate apprenticeships nosedived by 75%.

Significantly, although apprenticeship participation is up for those aged 25 and over, it has decreased for both the under 19 and the 19-24 age group – the very age groups for whom apprenticeships are chiefly designed and with which they’re usually most valuable.

Participation in government funded adult (19+) further education also fell by 3.8%, while traineeship starts decreased by a worrying 15.7%.

 

Small Firms Overwhelmed by Complexities of Apprenticeships

So, who or what is to blame for this sudden decline in apprenticeship take up?

Since April, businesses with a payroll of more than £3m have been charged 0.5% of their payroll towards the ‘apprenticeship levy’, created provide £3bn annually for four years to fund future apprenticeships.

Also, the new apprenticeship scheme requires companies to send apprentices outside the workplace for training for one day each week, and employers with 50 or more staff have to contribute 10% of the training costs. This leaves employers with not just training costs, but the cost of hiring staff to cover absent apprentices.

Verity Davidge, Head of Education and Skills Policy at the manufacturers’ organisation EEF, called the fall in apprenticeship numbers “shocking, but frankly unsurprising.”

“Accessing the funding has proven complex and difficult to unlock in time, and employers have struggled to get their heads around the complex rules and restrictions in accessing funds,” she said.

“As a result, some apprentices have been told that their apprenticeship has been put on hold for now, which is clearly a huge disappointment for young people who had effectively been offered a job – only to have their hopes dashed.”

However, Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said he didn’t believe the apprenticeship levy was solely to blame. “The reality is that 98% of firms don’t pay the levy, and these small businesses will be essential to the Government reaching its target of 3 million apprenticeships by 2020.”

Mr Cherry said that the figures had confirmed the FSB’s fears of a significant drop in apprenticeships.

“Getting more people doing apprenticeships is critical, especially if we are to tackle the skills shortage biting many small firms,” he warned. He too believes that complexity is a big part of the problem.

“While many small firms are committed to apprenticeships, many are still overwhelmed by the complexities in the system. The Government should make sure that when levy payers are able to share their digital vouchers they do so with small firms in their supply chain. Small firms should also be involved in the design of the new apprenticeship standards.”

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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