CollegesWales and the National Training Federation for Wales warn of devastating impact of apprenticeship funding cuts 

CollegesWales and the National Training Federation for Wales (NTFW) have today published new data which highlights the far-reaching economic and social consequences of apprenticeship funding cuts in Wales. 

Independent research, carried out by The Centre for Economics and Business Research (Cebr), highlights the significant economic and social cost of apprenticeship funding cuts, particularly affecting the most deprived communities, and critical sectors like healthcare and construction. The findings emphasise the need for sustained investment in apprenticeships to support economic growth and workforce development in Wales.

As a result of the circa 14% budget reduction, the report highlights: 

• Nearly 6,000 fewer apprenticeship starts in Wales this year 

• A £50.3 million ‘short run’ impact on the economy  

• The health and social care and construction sectors are being impacted the most  

• Funding cuts are disproportionately affecting the most deprived within the Welsh population

CollegesWales Chief Executive, David Hagendyk, said, 
“The data is deeply concerning and underlines the devastating impact of apprenticeship funding cuts on Wales’ economy and our most vulnerable communities. A strong apprenticeships programme is critical for Wales’ economic recovery, equipping individuals and businesses with the skills they need for success. Apprenticeships are fundamental to building a stronger, greener and fairer Wales.” 

NTFW Strategic Director, Lisa Mytton, added, 
“The findings are a stark warning. Without urgent action, we risk long-term damage to Wales’ workforce and economy. Apprenticeships must remain a priority in government funding to secure our future.” 

CollegesWales and the NTFW have previously called on Welsh Government to restore the apprenticeships budget to levels seen prior to the loss of European Structural Funds. The findings of the research endorse this call so as to mitigate any further impact to the Apprenticeships Programme in Wales beyond this year. 

The Welsh Government must restore funding for the apprenticeship programme. It is critical to give our public services the staff and the skills they need to improve outcomes and to give businesses the skills they need to grow the economy. 

Key Information

Overall Economic Loss

Short-term Impact The immediate economic loss is estimated at £50.3 million in Gross Value Added (GVA).

Long-term Impact Two scenarios are considered:

• Scenario 1 (Partial Convergence) Long-term loss of £165 million.
• Scenario 2 (Skills Development) Long-term loss of £108.5 million.

Total Economic Loss Combining short-term and long-term impacts, the total loss ranges from £158.8 million to £215.7 million.

Industry-Specific Impact

• Health Sector The most affected, with losses up to £66 million.
• Professional Services and Construction Significant losses, with construction facing up to £42.5 million in losses.
• Manufacturing Least affected, with losses of around £6.7 million.

Impact by Deprivation Decile

Most Deprived Deciles The bottom 40% of the population will experience the highest GVA loss, highlighting the disproportionate impact on the most vulnerable groups.

Sector-Specific Insights

• Healthcare Apprenticeships Potential reduction of 2,613 apprenticeships, exacerbating existing workforce shortages and impacting NHS service delivery.
• Construction Apprenticeships Estimated reduction of 565 apprenticeships, leading to a significant GVA loss and worsening workforce shortages in the construction industry.

Impact on Training Providers

• Redundancies Loss of 61.7 Full-Time Equivalent (FTE) positions among training providers, resulting in a salary loss of £1.67 million and a GVA loss of £3.36 million.
• Subcontractors Additional 26 FTE positions lost, with a total salary loss of £743,500 and a GVA impact of £1.49 million.