BREAKING: First official apprenticeship levy figures show a 61% fall in starts

Total apprenticeship starts for May, June and July fell a staggering 61% compared to the same period last year.

Provisional figures published by the DfE this morning, as part of the Statistical First Release, include the apprenticeship starts after the levy system began on the 1 May.

All apprenticeship starts from May (with the exception of 16 to 18 year-olds at employers with fewer than 50 employees) will have involved, for the first time, a mandatory financial contribution from the employer, either from the levy account or the 10 percent co-investment.

The Department for Education said: “Between February and April 2017, there was an increase in apprenticeship starts compared to the same point a year earlier (174,100 and 118,800 respectively), an increase of 47%. Between May and July 2017 (quarter 4 of the 2016/17 academic year), apprenticeship starts have decreased to 43,600 from 113,000 over the same period in the year before (quarter 4 of the 2015/16 academic year), a decrease of 61%.”

Responding to the dramatic fall in starts since May, a Department for Education spokesperson said:“Our apprenticeship reforms have put control back into the hands of employers so they will gain the skilled workforce they need to compete globally.

“We know that the last year has been a period of huge change for employers but it is right that they are taking their time to plan ahead and maximise the opportunities the apprenticeship levy can bring.”

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Mark Dawe, chief executive of the Association of Employment and Learning Providers told FE Week: “Sadly we saw these numbers coming long before the levy even started because of the way the new funding system has been designed.  Until we see the September starts, we don’t know whether the three million target is under threat but the numerical target isn’t really important here.  What is needed are changes that will restore incentives for employers to recruit young apprentices and a guaranteed minimum budget for non-levy payers’ apprenticeships which will ensure that there are opportunities in the many areas of the country without large employers.  

“AELP is receiving plenty of anecdotal and factual evidence from its members that the government’s own social mobility agenda is being undermined by the levy reforms with fewer lower level apprenticeships available to offer a ladder of opportunity and the damage is also being done in sectors that are crucial for the post-Brexit economy such as hospitality and health and social care. 

“We therefore need a proper debate about future funding systems and approaches in anticipation of the levy being used up by levy payers.  This has to take a hard look at the barriers which are putting off employers from taking on apprentices such as the level of financial contribution required from them and the amount of time mandated for off-the-job training within an apprenticeship.”

And Neil Carberry, managing director of people policy at the CBI tweeted this:

This was followed by a statement in which he said the “disappointing data” would “come as no surprise to companies, who have repeatedly made clear that the current design of the apprenticeship levy system is not effective”.

“Businesses believe in apprenticeships but there can be no argument now –  reform of the levy system is needed urgently to ensure its success,” he said.

And shadow skills minister Gordon Marsden had this to say on Twitter about today’s statistics:

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  1. Most public sector employers are still going through a drawn-out, ill thought out procurement process and are unable to spend an ever increasing levy pot.
    As an NHS Trust we are currently sitting on 1/2 million that could be spent on training for staff and benefiting patients but will go back into the government coffers after 2yrs….

  2. It’s beyond frustrating and this is the outcome most people predicted. Having attempted to highlight the numerous disadvantages of the revised funding system, particularly for non levy paying employers to senior figures at The ESFA & beyond, my advice was either disregarded or not listened to. My peers from other institutions raised similar concerns time and time again; plus the views from thousands of employers again either completely disregarded or not properly listened to.
    It’s an absolute shambles, start listening to the people delivering this to learners and employers – listen to those who can provide meaningful advice that could help reform; not hinder it.

  3. Come on FE Week, you must know that the 61% drop is offset by the 47% increase in starts in quarter 3 as providers brought forward every start possible in advance of the non-levy system coming in. Yes, there are delays in starts via levy payers but the main issue reflected in Q4 figures is front loading. The DfE is right to point this out. The full year drop is 2.5% nationally. So let’s cut the drama and look at the facts – the figures are not good and not on target for 3 million starts in this parliament but at this stage they are not a disaster. To avoid that the Government needs to gives providers stability on non-levy contracts, remove non-levy employer contributions, effectively incentivise 16-18 recruitment and scrap the 20% off-the-job rule. And looking over the horizon let’s avoid small employers having to manage apprenticeship accounts on line via the Apprenticeship Service next April – they won’t like that either! Paul Mitchell. Executive Director, SCTP.

  4. I agree that it needs revising as for small employers for example nurseries, having limited income and are required to meet ratios and raise standards of childcare meeting Ofsted requirements of having staff trained to level 3 but struggle to enable learners to have 20% off the job. Changes need to be made now, before it’s too late.