DfE figures reveal colleges hit hardest by move to apprenticeship levy funding

Colleges were hit hardest by the move to apprenticeship levy funding, FE Week analysis of new figures published by the Department for Education have revealed.

The statistics, which included the number of starts per provider for the first time, showed that colleges’ share of the market dropped from 31  to 26 per cent from 2016/17 to 2017/18, while their starts plummeted 35 per cent.

At the same time, ‘other public funded’ providers – which includes universities and employers – saw their share go up from eight per cent to 12 per cent as starts jumped 17 per cent.

Meanwhile independent providers’ share of the market remained at 61 per cent over the two years, while starts fell by 24 per cent – the same as the sector average.

Colleges were responsible for 99,220 starts last year, down 35 per cent – or 52,740 – on the previous year’s total of 151,960.

That’s an 11 percentage point bigger fall than the sector-wide drop of 24 per cent, revealed in last week’s final year figures.

Some of this fall in starts will have been the result in changes to rules around subcontracting, which hit colleges that had previously subcontracted much of their provision.

West Nottinghamshire College, which previously subcontracted the overwhelming majority of its provision, had just 1,440 starts last year – down a massive 79 per cent on the previous year’s total of 6,830.

The college blamed the rule changes, which meant it could no longer subcontract entire apprenticeship programmes, for having to make £2.7 million savings and cut 100 jobs earlier this year – before it spiralled into a financial crisis that led former principal Dame Asha Khemka to resign.

And Eastleigh College, which previously told FE Week it subcontracted around 80 per cent of its provision, saw its start numbers drop by 75 per cent – from 6,720 in 2016/17 to 1,630 in 2017/18.

Meanwhile, there were 45,450 starts in ‘other public funded’ providers last year – an increase of 17 per cent on the previous year’s figure of 38,910.

Much of this growth was at providers new to the apprenticeship market, including universities delivering degree-level apprenticeships for the first time.

They made up six of the 10 ‘other public funded providers’ with the most starts in 2017/18 that had zero or fewer than five starts the year before.

The remaining four were NHS trusts – reflecting the fact that the country’s largest employer has a £200 million levy pot to spend.

Independent providers delivered 228,090 starts in 2017/18, down from 300,170 the year before.

That’s a drop of 24 per cent, the same proportion by which starts fell across the board last year, according to final full year figures published last week.

Former skills minister Nick Boles warned colleges more than three years ago not to let independent providers “nick your lunch”, as he called for them to deliver more apprenticeships.

FE Week reported last year that colleges were failing to heed his words.

A freedom of information request by the Association of Employment and Learning Providers revealed that 74 per cent of all apprenticeship starts in 2015/16 were with independent providers, while colleges were responsible for just 21 per cent.

Last month the current skills minister Anne Milton struck a different note from her predecessor by telling the Association of Colleges conference that she wanted collaboration between colleges and private providers in delivering apprenticeships.

Her words were a change from what was written in her speech, which urged colleges to be a “real competition” for private providers.