The introduction of foundation apprenticeships could place this year’s record apprenticeships budget under strain, a senior official has suggested.
Speaking on day two of the Association of Employment and Learning Providers (AELP) annual conference in London this week, the Department for Education’s apprenticeships director warned of potential “savings” and “trade offs” if the new scheme, launching this August, became too popular.
Kate Ridley-Pepper highlighted that the DfE’s apprenticeships budget was “99 per cent fully spent” in recent years.
She told delegates: “As we look to the future, it is worth reflecting on the fiscal context. In 2023-24, 99 per cent of our £2.5 billion apprenticeship budget was spent, and that picture is likely to be very similar for 2024-25.
“And while thankfully not all large employers utilise all of their levy funds, which enables us to give 30 per cent of our budget and invest that in SMEs, the position is not sustainable in the long run”.
Ridley-Pepper cited rising demand for higher-level apprenticeships, which attract higher levels of funding than lower-level programmes, as the reason for “tough decisions” about how to fund the government’s new growth and skills offers, including new short courses in specific subjects from April.
Foundation apprenticeships, new eight-month programmes designed for young people, come online this August. Skills minister Jacqui Smith told MPs this week she hopes for 30,000 young foundation apprentices.
Other pressures on the budget could come from reduced duration apprenticeships and the removal of English and maths rules earlier this year, which the government believes could generate 10,000 new starts.
Then there is the widely anticipated rush to start level 7 apprenticeships before January when funding is removed for new entrants aged 22 and over.
Asked by AELP chief executive Ben Rowland about how one could convince the Treasury that spending on “loads of” youth foundation apprenticeships could help reduce rising NEET levels, Ridley-Pepper said she needed “compelling cost-benefit arguments”.
She added: “As I say, we’ve spent 99 per cent of our budget in the last couple of years. So there is a slight, not risk exactly, but if [foundation apprenticeships] were popular, that might cause pressures that mean we have to look elsewhere to make other savings and trade offs, unless we can provide that case for additional funding.
“But there isn’t a lot of additional funding in the system”.
The DfE’s apprenticeship budget has risen to £3.075 billion this year.
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