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Philip Hammond: Government 'always expected' apprenticeship starts to fall

Chancellor admits that the fall in apprenticeship starts since the introduction of the levy is a 'serious' issue

Philip Hammond says the government is looking at the apprenticeship levy in light of a significant fall in the numbers starting apprenticeships

Chancellor admits that the fall in apprenticeship starts since the introduction of the levy is a 'serious' issue

The chancellor of the exchequer has said that the fall in apprenticeship starts is a “serious issue” which both the Treasury and Department for Education (DfE) are looking at.

Philip Hammond made the revelation during Treasury questions in the House of Commons on Tuesday.

Helen Goodman, shadow minister for foreign affairs, asked the chancellor what he was going to do about the middle-level skills base, citing a collapse in apprenticeship starts since the introduction of the levy last April and cuts to FE colleges.

'Fewer starts than we expected'

The chancellor said the government is highly committed to the apprenticeship programme. “I recognise that starts are down – we always expected that – but something else is happening, because analysis shows that now that employers are contributing with their own levy to apprenticeship programmes, they are opting for higher-level apprenticeships," he added.

“There are fewer starts than we expected, but we are seeing a much higher level of apprenticeship. There are more degree-level apprenticeships and more apprenticeships at the higher levels. The DfE and the Treasury are looking carefully at how this is working.

“This is a serious issue, but the important question is about making sure that the skills that the economy needs are generated.”

No SME fund details

The number of apprenticeship starts fell immediately after the introduction of the levy, and they continue to stay well below the level of last year. The latest figures for the first two quarters of the 2017-18 academic year show there has been a 25 per cent decrease in the number of apprenticeship starts.

In his Spring Statement, the chancellor announced an £80 million fund to help small businesses access the apprenticeship levy, yet six weeks on there has been no further announcement about when the fund will become available.

Last month apprenticeships minister Anne Milton told a House of Lords committee that she had “absolutely no idea” how the government’s flagship 3 million apprenticeships starts target was set.

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