Huge under-delivery on 16 to 18 apprenticeships

More than 520 providers under-delivered on their August 2012 16 to 18 apprenticeship allocations by a total of £241.5m.

Research by FE Week into figures released by the Education Funding Agency, shows 769 colleges and independent learning providers (ILPs) were initially going to be funded with £826.9m for the programme.

In spite of these difficulties we revised our plans at the end of the first quarter, when we had a better indication of market conditions, and delivered at a similar level to the previous year.”

But 524 providers delivered less than their initial allocation by a total of £241.5m come the end of last academic year. And, while the funding allocation for all providers’ under-19 apprenticeships delivery had been revised down to £663.8m by July last year, the Skills Funding Agency still paid out £46.1m less than this.

It comes after FE Week reported in June last year how Simon Judge, the Department for Education’s finance and commercial director, wrote to the Education Select Committee to explain why the budget for under-19 apprenticeships in the current financial year had fallen nearly 20 per cent to £684.3m.

He said the removal of poor quality provision explained some of the under-spend, but increased competition from applicants aged 19-plus, funded by the Department for Business, Innovation and Skills, was also a factor.

And figures published before Christmas, in the statistical first release, showed the number of under-19 apprenticeship starts fell from 129,900 in 2011/12, to 114,500 in 2012/13. However, across the sector, 245 providers over-delivered on their August allocation by a total of £32.3m.

Nevertheless, the largest under-delivery was by Pearson in Practice Technology Limited, which was allocated £46.5m in August 2012 but was given £1.4m. A spokesperson said Pearson in Practice “closed down” a year ago, but declined to comment further.

The second largest under-delivery was by JTL, another ILP, which was allocated £17.4m for under-19 apprenticeships, but given £11.1m.

A spokesperson for JTL said: “Increased employer contributions [towards the cost of apprenticeships] in a sector that is only just starting to recover from economy-wide setbacks has meant that many employers have been reluctant to take on a four year commitment.”

Newcastle College Group was originally allocated £7.3m, but received £4m — the biggest drop among colleges.

Chris Payne, group director of planning and performance, said: “Employers were not keen to take on younger apprentices due to the economic climate.

“In spite of these difficulties we revised our plans at the end of the first quarter, when we had a better indication of market conditions, and delivered at a similar level to the previous year.”

A government spokesperson said: “We are radically reforming apprenticeships so that they are more rigorous and responsive to the needs of employers. The small decline in 16 to 18 apprenticeship starts is due to quality improvement measures.”

A number of providers were omitted from FE Week research where they appeared solely in government figures for either August allocations or final funding levels.