Are apprenticeships facing an uncertain future?

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The UK government has continued to assert its support for apprenticeships. But are the assurances wearing thin?

Education Minister Gavin Williamson, shortly before Parliament was prorogued, responded to a question from the former Minister for Skills Minister, Anne Milton.

Milton asked Williamson whether “the apprenticeship programme has the year-on-year cash that it needs to continue to deliver the life-changing opportunities that it does to people of all ages, without restriction.”

Williamson said in response: “I will certainly look at how we ensure that we have the right funding for apprenticeships. Apprenticeships have been one of the greatest successes of the government. ​

“We have achieved so much over the last nine years, encouraging so many young people to take up the opportunity to train in an apprenticeship and have the skills that they need to succeed in future. We will be determined to build on that success.”

Gordon Marsden, Shadow Education Minister, was not convinced, saying:

“This government are making a complete hash of the apprenticeship levy in quality and quantity. It is running out of money, so the trainers who provide 70% of all apprenticeships cannot meet the demand from small businesses…

“There was nothing new in the spending review for providers or for small businesses or apprentices. Starts for 16 to 18-year-olds are down 23% on the pre-levy numbers. There was nothing for the 800,000 young people who are stagnating in the NEET category, as my hon. friend the Member for Leeds West (Rachel Reeves) pointed out.

“There is not even a dedicated day-to-day Skills Minister to tell them, or us, why they are in this mess. Has anyone in this disappearing government left the lights on?”

So where are we with apprenticeship funding?

Mixed pictures

The Department for Education published figures on June starts in late August. It shows a healthy 21,000 starts in June, though this is down from 25,000 at the same time last year. Figures on new starts from August 2018 to June 2019 were better – 360,000 and up by 12,000 from the previous year.

In the 2018-19 period, 46% of new starts were people over 25. Around 20% were level 4 and above – the only area which grew in absolute terms. There was a fall in new starts at level 2, which, say Henehan and Ahmed at the Resolution Foundation, is not about levy-payer choices:

“…the types of apprenticeships that experienced the most dramatic drops in starts spent fewer than average hours in formal training and a higher-than-average share of them were unaware of the fact they were classed as an apprentice.”

In other words, there was a fall in “poor-quality apprenticeships”.

Nevertheless, there is a concern about apprenticeship provision for 16+ at the lower levels. A survey by the Department of Education showed that 83% of the over 25s who started a higher-level apprenticeship were already employed by their company. To correct that generational problem, say the authors, “policymakers should consider requiring levy payers to dedicate at least half of their levy expenditure to the under-30s and an overlapping half to new starters to the firm.”

Meanwhile, the cash shortage for non-levy apprenticeships persists. The Association of Employment and Learning Providers surveyed 235 training providers. They found that a quarter had to turn away new SME apprenticeship employers and 17% have stopped recruiting altogether from this sector. The survey also found that a third of providers needed 25% additional funding to meet demand.

Mark Dawes, CEO of the AELP, said:

“It’s been over four months since the DfE’s permanent secretary told a Commons committee that ‘something is going to have to give’ unless more funding for apprenticeships was forthcoming and we’re saying that the damage is already being done.

“More recently the Prime Minister said that apprentices are ‘indispensable to this country’ and that ‘we have a desperate shortage in this country of people with the right skills’. The clear message from apprenticeship training providers is that the shortage will quickly become much worse unless the government delivers quickly on Boris Johnson’s funding promise.”

Policy uncertainty

Apprenticeship policy is, like many UK policy arenas, enmeshed in the uncertainly surrounding both Brexit and the current government’s handling of its business. It remains unclear whether the pinch points of apprenticeship policy will face any immediate resolution.

Says Richard Alberg, Chief Executive of MWS Technology:

“It is a difficult time for all those in the business of apprenticeships, as they have to plan around many very different short-term scenarios.

“But looking at what’s happening with the skills agenda and the challenges of economic change globally, there is an inevitability to the idea that the government will have to fund apprenticeships to the right levels if we are to remain competitive as a nation – with or without Brexit.

“The Fourth Industrial Revolution won’t wait for us to resolve our political rows.”

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