Apprenticeship starts falling off a cliff: Huge Covid-related crash in employers offering Apprenticeships

Latest @AELPUK Covid impact survey finds three-fifths of employers have stopped recruiting #apprentices altogether and many more have slashed new starts – Government still refusing to step in to keep #training infrastructure in place 

The third AELP covid impact survey has found that 60% of employers have stopped recruiting apprentices altogether and 75% of them have stopped at least four-fifths of starts normally expected at this time of year.

Despite a leading QC advising that the DfE is displaying ‘an abuse of power’ in not complying with Cabinet Office government supplier relief guidance, ministers are refusing to support the training infrastructure which is required now and will be needed to reskill unemployed people.

Training providers are facing a massive Covid-related cash squeeze because employers have stopped recruiting new apprentices and the lockdown is preventing existing apprentices from being able to complete their training programmes.

The latest findings from an Association of Employment and Learning Providers provider survey come as education ministers continue to resist applying Cabinet Office supplier protection guidelines to the vast majority of apprenticeships and in doing so, according to a leading QC in public law, are committing “a multiplicity of legal errors”.

The third AELP Covid impact survey has found that:

• Crash in new apprenticeship starts: 60% of employers have stopped all new apprenticeship starts since the pandemic began and 75% of them have stopped at least 80% of starts normally expected at this time of year.

• Apprentices unable to complete their training programmes: A third (33.8%) of apprentices have less than a 1 in 5 chance of completing their programmes (or end point assessment) in the normal expected timescale while two-thirds have less than a 60% chance of completing.

• Decline in overall provision: 31% of providers anticipate anything between a quarter to a half of their apprenticeship business disappearing as a result of the pandemic while nearly four out of five (78%) expect to see a decrease to some degree.

• Treasury-backed loans not the answer: Less than 4% of training providers have managed to obtain so far a Treasury backed Coronavirus Business Interruption Loan (CBIL) with another 21% still waiting to hear if their application has been successful.  28% of providers aren’t eligible.

Training providers only start receiving funding from the government’s Education and Skills Funding Agency when an apprentice starts training and 20% of the total funding depends on the apprentice completing the programme.  The survey results have therefore confirmed that training provider cashflow is being badly squeezed at both ends of the apprenticeship pipeline, threatening the survival hopes of providers the longer the lockdown continues and the longer DfE ministers refuse to provide financial support in respect of the two-thirds of apprenticeships which are funded by the apprenticeship levy.

80 providers working with 12,458 businesses employing 35,350 apprentices responded to the third impact survey which AELP has conducted since the beginning of the pandemic.

AELP chief executive Mark Dawe said:

“Training providers have done an amazing job to keep training going remotely for apprentices, but they can’t do this indefinitely if their income is running dry.

“The government needs to support young people with apprenticeships now and to reskill unemployed adults, and it needs good quality training providers operating around the country to be able to do this.

“This latest survey confirms again that CBILs do not offer the solution that the education ministers expect and so they should be looking at extending their Covid supplier relief scheme to cover all apprenticeships in line with the Cabinet Office guidance.

“Contrary to comments made, training providers are not just like any other private business.  They are government contractors delivering the government’s flagship skills programmes which will be critical after the pandemic is over.  No Treasury money is required for the DfE to preserve the provider infrastructure needed but time is now running short before we start seeing high quality and niche providers lost for good.”

Legal advice on DfE’s non-compliance with Cabinet Office guidelines

On the question of DfE financial support for apprenticeships, the Education Secretary Gavin Williamson told the Commons Education Committee on 29 April: “We always comply with Cabinet Office guidance and we always will do”. 

But a leading QC in public law disagrees and has opined strongly that the apprenticeships of levy paying employers should be supported by government under the Cabinet Office supplier relief guidelines.  These apprenticeships make up two-thirds of the total programme. 

An “abuse of power” – Exclusion of levy funded apprenticeships from the scope of Cabinet Office Covid-19 government contractor protection guidance: @AELPUK publishes legal advice in relation to @EducationGovUK‘s exclusion of #levy funded #apprenticeships… https://t.co/5IBCnQ5LbP pic.twitter.com/3Nnotp3z9A

— FE News – The #FutureofEducation News Channel (@FENews) April 30, 2020

Sector findings in the survey

Providers were asked in the survey how apprenticeship delivery was being adversely affected in particular sectors.  The sectors which stood out in this regard were:

• Hospitality and Catering where half of the respondents said that they were looking at over three-quarters of their provision disappearing

• Engineering and Manufacturing with 36% of providers looking at a drop of between 25 and 50%

• Adult Social Care where nearly half of providers (46%) are facing more than a 25% fall

• Digital (surprisingly) where a third of providers were looking at a drop of between 25 and 50%

• Education and Childcare where two-thirds of providers are facing a similar drop to digital

• Transport and Logistics where 36% of providers were looking at a minimum fall of 25%

• Hair and Beauty where 18% of providers were concerned that they might lose over 75% of their provision although 47% were looking at a loss between 10 and 25%

• Business and Administration where 46% of providers were looking at a drop of between 25 and 50%.

Agriculture, the professions, creative industries and health & science are among those sectors which are relatively unscathed. 

AELP represents the independent training providers who train 7 out of 10 apprentices in England.  In its membership, it also has colleges, universities and employers who deliver apprenticeships and other skills programmes.

Latest data shows that there are 627,800 young people and adults on an apprenticeship programme.  Even before the pandemic began, starts for February 2020 showed a 11% drop on the previous year’s figures.  Apprenticeships offered by levy-paying employers now account for two-thirds of new starts and the DfE has decided that these are not covered by the supplier relief available under the Cabinet Office guidance (Cabinet Office Procurement Policy Note 02/20: Supplier relief due to COVID-19).