Sector Response to 61% decrease in Apprenticeship starts since Levy introduction
The DfE has released their Statistical First Release on the number of Apprenticeship starts from 1st May to 31st July 2017 (which is the first quarter after the introduction of the Apprenticeship Levy). Here is a link to the SFR Apprenticeship Starts report.
On page 7 of the report the DfE state: Between February and April 2017, there was an increase in apprenticeship starts compared to the same point a year earlier (174,100 and 118,800 respectively), an increase of 47%. Between May and July 2017 (quarter 4 of the 2016/17 academic year), apprenticeship starts have decreased to 43,600 from 113,000 over the same period in the year before (quarter 4 of the 2015/16 academic year), a decrease of 61%.
With the implementation of the Apprenticeship Levy, employers now have 24 months to spend funds in their apprenticeship service accounts.
A Department for Education spokesperson said:
“Feedback we have had from levy paying employers has shown they are taking their time to maximise opportunities for the levy and they plan to increase their demand for apprenticeships.”
“Our apprenticeship reforms have put control back into the hands of employers so they will gain the skilled workforce they need to compete globally.
“We know that the last year has been a period of huge change for employers but it is right that they are taking their time to plan ahead and maximise the opportunities the apprenticeship levy can bring.”
The DfE spokesperson further highlighted the following figures: ” We have seen over 1.1 million apprenticeship starts to date (since May 2015).
“We are transforming the skills landscape to ensure there are high quality apprenticeship opportunities for millions of people of all ages and from all backgrounds.
“The total investment in apprenticeships in England will be £2.45 billion by 2019/20; double what was spent in 2010-11.”
Mark Dawe, Chief Executive, Association of Employment and Learning Providers (AELP) said:
“Sadly we saw these numbers coming long before the levy even started because of the way the new funding system has been designed. Until we see the September starts, we don’t know whether the 3 million target is under threat but the numerical target isn’t really important here. What is needed are changes that will restore incentives for employers to recruit young apprentices and a guaranteed minimum budget for non-levy payers’ apprenticeships which will ensure that there are opportunities in the many areas of the country without large employers.
“AELP is receiving plenty of anecdotal and factual evidence from its members that the government’s own social mobility agenda is being undermined by the levy reforms with fewer lower level apprenticeships available to offer a ladder of opportunity and the damage is also being done in sectors that are crucial for the post-Brexit economy such as hospitality and health and social care.
“We therefore need a proper debate about future funding systems and approaches in anticipation of the levy being used up by levy payers. This has to take a hard look at the barriers which are putting off employers from taking on apprentices such as the level of financial contribution required from them and the amount of time mandated for off-the-job training within an apprenticeship.”
Stephen Evans, Chief Executive, Learning and Work Institute comments:
“Today’s data show some worrying signs. The headlines will be grabbed by the 61% fall in apprenticeship starts since the Levy’s introduction. It’s too early to tell if this is teething problems, a more permanent problem, or the result of apprenticeship starts being brought in before the Levy’s introduction (in the three months before the Levy, starts were up 47%). Our concerns over quality and access remain, there’s still time to address these so we have a world class apprenticeship system.
“The data also show significant falls in adult participation in Further Education, including English and Maths, Level 2, Traineeships, offender learning, and community learning. We all know the economic and social benefits of learning, so these continued falls represent a simmering national crisis. We need investment and innovation to break out of this downward spiral, to make Britain a learning nation.”
Vince Cable, Leader of the Liberal Democrats and former Secretary of State for Business, Innovation and Skills, said:
“As Secretary of State I presided over a huge increase in the quantity and quality of Apprenticeships. It was a system that gave millions a chance to develop new skills and find work. The Conservatives are trashing that legacy.
“It is damning that this government are giving new apprentices such a poor deal. Hundreds of thousands of people will lose out from the opportunity to enter high skilled work.
“We should be working towards a system that helps all people, no matter their background, get an opportunity to get ahead in life. These figures expose a major setback towards that goal.”
Angela Middleton, Chairman and Founder of apprenticeships consultancy of MiddletonMurray comments:
“The news of the 61% drop in apprenticeship applications highlights the widespread lack of understanding of what the levy means for employers – and ultimately, how it can benefit their business.
“Since the Apprenticeship Levy was introduced earlier this year, companies with a pay bill over £3m+ must pay a monthly fee that goes towards hiring and upskilling apprentices or existing employees, and the government will top this up.
“More industries than ever are looking to automate processes, where possible, so we must invest in quality jobs. The levy is a measure that will help employers equip the next generation of workers with the best possible skills that we need going forward.
“The 61% drop points to a staggering misunderstanding of the levy and we must raise awareness of its manifold benefits now, before it is too late.”
What do you think about the SFR report on the drop in the number of Apprenticeship starts after the introduction of the Apprenticeship Levy?
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