Government figures this month indicated advanced apprenticeship starts had plummeted since the introduction of FE loans and with more policy changes afoot David Harbourne asks whether we could be in line for another big drop.

Official statistics have confirmed a massive fall in the number of adults (25+) starting level three apprenticeships.

In the first quarter of 2012/13, 24,400 adults started an advanced apprenticeship (the provisional figure had been 23,300).

But in the same quarter of this academic year, the provisional number was just 2,700.

The difference is, of course, funding.

At the start of the current year, the government stopped subsidising level three apprenticeships for adults.

Training costs now fall entirely on employers or individual learners.

It soon became clear that individuals awee reluctant to take out adult learning loans to pay for apprenticeships, and the government is due to suspend that part of the deal.

However, the figures show that employers, too, are reluctant to pay the full cost. I am not surprised.

Many small businesses choose not to invest much in training because they fear they will lose staff to rival firms.

However, the stakes don’t seem so high when someone else is helping to pay for the training. That’s one reason why successive governments have chosen to subsidise apprenticeships.

Indeed, many employers have become accustomed to paying nothing towards external training and assessment costs, though they do — of course — pay apprentice wages.

Research published by the Department for Business, Innovation and Skills showed that apprentice numbers would fall if employers were required to pay part or all of the costs of external training and assessment. The latest figures bear this out.

Late last year, the government announced that employers would be required to pay for training and assessment up front before submitting a claim for a partial refund.

Skills Minister Matthew Hancock didn’t rule out mandatory contributions even for apprentices aged 16 to 18.

Some larger employers will see the cost as worthwhile.

Major engineering businesses, for example, have long understood that training can reap long term returns: because staff turnover is low, the initial investment is recouped many times over in the form of improved productivity.

They are prepared to put time and energy not just into training, but also all of the associated planning, processes and procedures.

My worry is that outside engineering, many businesses — especially small firms — will see training and assessment as a short term cost, not a long term investment.

The cost and the fear of poaching will make them think twice about employing apprentices. They may also balk at managing paperwork previously handled for them by colleges and training providers.

If I’m right, apprentice numbers will fall sharply, just as they have for adult advanced apprenticeships.

If so, it won’t be long before the economy starts to suffer because employers will find it harder and harder to recruit the right people, at the right time.

And it’s not just employers who will lose out: the prospects of tens of thousands of people are at risk here.

The government has wisely decided that ideas for simplifying apprenticeship standards should be tested by trailblazers before being rolled out more widely.

With so much at stake, they should take a similar approach to funding. Or better still, think again.

David Harbourne, director of policy and research at the Edge Foundation