The number of apprenticeship starts is not only likely to grow much more slowly than expected, it is also actually likely to drop in the coming months, a new study by the Warwick Institute for Employment Research has suggested.
The research, commissioned by the Association of Employment and Learning Providers (AELP), found that over a third of employers planned to reduce the number of apprenticeship starts between now and October, with just 17 per cent anticipating an increase in the total during the period.
Half of employers planned to reduce their overall number of apprentices, compared with a quarter anticipating an increase.
Net fall in apprenticeships
If these trends were replicated across the country, it would equate to “a net fall in apprentice numbers of 17 per cent”, according to the institute, with the drop most pronounced among non-levy payers.
AELP chief executive Mark Dawe said there were several reasons for this. In the case of large firms that pay the levy, many were holding back on recruiting apprentices due to economic uncertainty ahead of Brexit, he said. Some were still waiting for their legal departments to clear the new contract with the Education and Skills Funding Agency (ESFA), Mr Dawe added, with others simply taking advantage of the fact that they had a full two years to spend their funding.
There was also a move among some levy payers towards focusing on a small number of high-level apprenticeships, which are more expensive than those at level 2 or 3, according to the AELP. In some sectors, there was a reluctance among employers to pay the 10 per cent co-investment contribution that they are obliged to pay under the new apprenticeship policy, said Mr Dawe.
The number of apprenticeship starts from non-levy-paying businesses will also drop, the research indicated. Earlier this year, the AELP warned that allocations for providers offering training for non-levy payers were 50 to 80 per cent lower than last year, threatening providers’ financial health and sustainability.
'Staff will lose their jobs'
The £440 million procurement exercise to support non-levy-paying employers was “paused” in April, with the ESFA saying procurement had been “markedly oversubscribed”. Instead, existing contracts have been extended until the end of the year, preventing new players from entering the market.
Mr Dawe said the research confirmed providers’ concerns: “In terms of the levy payers, the levy is fantastic, but the reality is it could take them months until they can take on any apprentices and years until they use up their levy money. I think of it as a three-year cycle. That means, for the next two years, the levy payers won’t approach numbers anywhere near what the government expects.” Without extra investment in apprenticeships for non-levy-paying employers, “staff will lose their jobs and providers will go bust,” Mr Dawe warned.
This is an edited version of an article in the 23 June edition of Tes. Subscribers can read the full story here. To subscribe, click here. To download the digital edition, Android users can click here and iOS users can click here. Tes magazine is available at all good newsagents.