As education secretary, Nadhim Zahawi stood before a sea of college leaders at the Association of Colleges annual conference in November 2021, he issued a “call to arms”: Colleges needed to increase their share of the apprenticeship market.
Back then, around 30 per cent of apprenticeships were delivered by colleges.
“If we really want to transform supply we will have to grow that number,” Zahawi told them. “I know colleges are more than capable of it.”
His plea was nothing new. In 2015, then skills minister Nick Boles challenged colleges to stop letting independent training providers (ITPs) “nick your lunch”.
Successive governments continued to talk up apprenticeship growth. In 2023, skills minister Robert Halfon told colleges to “focus on growth and quality”, while Bridget Phillipson and Lucy Powell have both called for more apprenticeship opportunities for young people.
Yet, colleges have instead gone backwards. Their apprenticeship starts fell 43 per cent from 99,220 in 2017-18 to 56,260 in 2024-25, while their market share dropped from 26 per cent to 16 per cent.
Colleges’ overall learner numbers fell initially, then increased from 1.22 million in 2020-21 to 1.46 million in 2024-25.
While overall apprenticeship starts have recovered slightly since 2022-23 following five years of decline, colleges, sixth form colleges and councils have continued to lose ground, with over two-thirds of the market now delivered by ITPs.
College outcomes compare favourably with ITPs, whose achievement rates rose from 51 per cent in 2022-23 to 63 per cent in 2024-25 but still trailed colleges, at 69 per cent.
Funding squeeze
Money is one explanation.
Apprenticeship funding rates have largely been fixed in cash terms since 2017, aside from some individual uplifts.
Six of the top 20 standards used by under-25s have received no increase despite significant inflation in staff salaries, construction materials and end-point assessment costs. And more than three-quarters of college apprenticeship starts are with under-25s, almost twice the proportion at private training providers.
In June, Skills minister Jacqui Smith asked Skills England to identify standards that should receive funding increases, but no decision has been forthcoming.
Uneven funding rates disadvantage colleges, which “traditionally see their mission as serving a local catchment area, offering a wide range of standards to reflect the wide range of local industry needs and student ambitions”, explains Andy Forbes, chair of Barking and Dagenham College and former principal of several further education colleges.
While colleges act like local community shops that must “stock a bit of everything but at a higher cost”, ITPs operate more like “big specialist chain stores” which can “cherry-pick particular occupational sectors and levels, and thereby can generate economies of scale through streamlining delivery”.
That breadth makes college apprenticeships less cost-effective, and “with finances so tight many colleges have been forced to slim down their offer”.
For four years, additional government funding intended to support staff pay awards was principally distributed through the 16 to 19 funding formula. Colleges with proportionately larger apprenticeship and adult provision therefore received less support towards their staff costs than those dominated by classroom-based 16 to 19 provision.
That matters particularly for apprenticeship-dependent institutions like Derwentside College, which receives around half its income from apprenticeships. It delivered a third fewer starts in 2024-25 than four years earlier.
This year, a two-year £485 million pay award uplift was extended to providers of non-16 to 19 education, helping to level the playing field.
But the underlying economics remain difficult, with AoC calling for 16-18 apprenticeships to be funded instead through study programme streams.
Jerry White, former CEO of City College Norwich, where starts were down 13.2 per cent in four years, believes it is a “national disgrace” that stagnant funding rates have “actively dis-incentivised” colleges from providing apprenticeship opportunities.
White recalls how when the Ukraine war started, the cost of copper piping for plumbing provision rose by around 35 per cent in a year, with no corresponding increase in the apprenticeship funding rate.
“When you’re running your eyes down the courses that contribute to your bottom line, in many colleges, towards the bottom of that list will be your apprenticeships,” he says.
City College Norwich has a “demographic boom” at 16 to 18 to fill its four plumbing workshops with study programme learners, rather than using that space for “apprenticeships that don’t contribute very much”.
But younger apprentices require considerably more support.
English and maths requirements continue to apply to 16 to 18-year-olds. And young apprentices need “wraparound personal support, mentoring and coaching in basic communication and other employability skills, and mental health support”, says Forbes.
“The current funding levels don’t reflect this, so colleges have the dilemma of either accepting poor retention and achievement rates (a potential Ofsted disaster) or subsidising extra support themselves.”
The qualification achievement rate (QAR) also disincentivises colleges from offering apprenticeships, according to recent research by the Fabian Society.
QAR measures the proportion of learners starting a funded qualification who go on to complete it, and is used by Ofsted during inspections. Whereas leaving a course early to take an apprenticeship may be a positive outcome for a learner, those withdrawals impact colleges’ QAR.
“This tension can lead to a perverse incentive for providers, who may focus on maximising retention rather than supporting students into apprenticeships,” they say.
Nick Bowles, telling colleges to stop letting ITPs “nick your lunch”
Ofsted risk
Poor apprenticeship provision can drag down an otherwise strong inspection for colleges.
Under Ofsted’s previous framework, 20 per cent of college apprenticeship provision was rated ‘requires improvement’ or ‘inadequate’ between 2020 and 2025, compared with 17 per cent for colleges overall.
Sixth form colleges appear particularly wary. Their apprenticeship starts fell 62 per cent between 2018-19 and 2024-25.
James Kewin, deputy chief executive of the Sixth Form Colleges Association, puts that partly down to the “world of pain” of apprenticeship bureaucracy and high dropout rates as well as the Ofsted risk.
Even where apprenticeships form only a small part of a college’s provision, a weak judgment can act as a limiting factor on leadership and governance.
“The system doesn’t help inclusive providers in that way,” Kewin says. “So over the years we’ve become more and more homogeneous in terms of curriculum offer, in that most colleges now just focus on 16 to 19.”
Ofsted’s new framework may alter the calculation. By the end of July 2026, only 13 per cent of colleges’ apprenticeship provision was rated ‘needs attention’ under the framework compared with 18 per cent over all categories.
Growth brings quality risks, too. Windsor Forest Colleges Group recorded the largest percentage increase in starts of any college, up 211 per cent to 280 in the four years to 2024-25.
But its achievement rate that year was just 51 per cent, well below the 60 per cent national benchmark, and the college has been working with a specialist from the FE Commissioner’s team. Achievement rates remain an “ongoing challenge”, board minutes state.
Staffing and compliance
Some colleges told Ofsted they narrowed their apprenticeship offer because of difficulties recruiting and retaining high-quality trainers.
Barking and Dagenham’s overall funded learner numbers increased 72 per cent in the four years to 2024-25, while at the same time it experienced the largest percentage reduction in starts of any college, plunging 88 per cent to just 20 starts.
Staffing challenges were a key reason, the college says, particularly in “technical trades, where FE salaries cannot compete with industry rates”.
In 2023, Coventry College was forced to transfer around 150 apprentices to other providers after Ofsted rated its apprenticeship provision ‘inadequate’, blamed partly on “an overreliance on agency staff” after struggles to recruit permanent tutors in plumbing, electrical and carpentry.
Coventry is now reintroducing apprenticeships, a move CEO Carol Thomas describes as a “significant step forward”.
Apprenticeship funding also brings considerable compliance risk for colleges.
Brockenhurst College cited “increasing compliance and administrative requirements” as a reason why its starts plunged 57 per cent in four years to 2024-25.
Meanwhile Kingston Maurward College, now part of Coastland College, became embroiled in a three-year £1.1 million clawback dispute with the Education and Skills Funding Agency. The college subsequently scrapped apprenticeships altogether, and its financial difficulties contributed to its merger with Weymouth College in 2024.
The then-principal Luke Rake said that alongside the risk of further clawbacks, the higher cost of visiting apprentices on rural placements proved challenging.
Andy Forbes, chair of Barking and Dagenham College
National skills bottleneck
Even after colleges successfully train apprentices, completing them brings another set of difficulties.
At Shrewsbury College, some electrical apprentices had to travel for four hours to Exeter for their end-point assessment (EPA) because the college’s own assessment centre was at capacity with no other centres available locally.
An AoC survey last year found 82 per cent of responding colleges experienced EPA delays of over a month, while 43 per cent endured waits of three months or more.
Government reforms are now moving away from the principle of a single EPA and allowing providers to conduct some assessment themselves, potentially removing one bottleneck.
The drop in some types of apprenticeships typically offered by colleges conflicts with national skills priorities.
Skills England estimates the UK will need 12,000 extra electricians by 2030, and 10,000 more plumbers and heating and ventilation workers. Yet electrical apprenticeship starts fell 5.5 per cent in 2024-25, while the main plumbing apprenticeship starts fell for three consecutive years from 2021-22.
Electrical and plumbing apprenticeships are in high demand, but present particular challenges because they typically take at least four years to complete.
“How many people at a young age stay with the same employer for four years?” asks Diana Martin, principal of Dudley College of Technology, where apprenticeship starts fell 41 per cent between 2020-21 and 2024-25.
Local skills improvement plans were supposed to bring employers, colleges and other education providers together to identify and respond to skills needs.
Of the 38 plans approved in 2023, four – Cheshire and Warrington, Cumbria, West Yorkshire and the South East Midlands – specifically pledged to increase apprenticeship take-up, and all followed through on that ambition; but largely through ITPs rather than colleges.
In Cumbria, apprenticeship starts have since fallen at all four of its colleges.
Employers pulling back
Ultimately, colleges cannot create apprenticeships without employers.
A 2023 UCAS study found three in five applicants not pursuing an apprenticeship said they could not find one in their preferred location.
The regional picture varies enormously. In the North East, colleges account for around 27 per cent of starts, compared to 11.7 per cent in the South East and 6.5 per cent in London. Adam Goldstein, until recently chair of Barnet and Southgate College, puts London’s low share down to the high concentration of ITPs there and the lack of very large employers in the market for apprenticeships.
But even in the North East, employers are becoming more cautious.
At Middlesbrough College, governors this year heard that SMEs, which dominate the Tees Valley economy, were struggling with “cost pressures and inconsistent demand – reducing opportunities” for apprentices.
AoC senior policy manager Claire Barker says colleges have seen increasing demand from young people, especially in construction and engineering apprenticeships, but are being blocked by “barriers” facing the employers they work with, including financial constraints and “the capacity to offer the right support in the workplace”.
Solihull College and University Centre CEO Rebecca Gater puts her college’s recent apprenticeships decline largely down to employer demand, with vacancies in the West Midlands being around one-third lower than the previous year.
Employers, she says, face “challenges around the investment of time and resources they need to put into an apprentice, and lack of understanding about how apprentices can benefit their businesses…and the paperwork a small employer has to do is quite significant”.
Apprenticeship growth since 2022-23 has been concentrated in business, digital and education apprenticeships rather than construction and engineering, despite the government’s repeated emphasis on technical and infrastructure skills.
An AoC survey found a third of colleges reporting a rise in starts in the first part 2025-26, with increased demand for construction, engineering, manufacturing, health, public services and care apprenticeships. But “limited” vacancies in construction, engineering and manufacturing have led to a rise in learners on full-time programmes instead.
Colleges are also confronting the pressure of rising NEET numbers, with many colleges expanding lower-level courses in response.
MidKent College’s apprenticeship numbers rose 29 per cent over the four years to 2024-25, but last year asked its electrical and plumbing apprenticeship provider JTL to leave its Maidstone campus to find space for around 500 young people on lower-level courses.
A spokesperson said the college needed to “support local efforts to reduce the NEET population here in Kent and Medway”.
Since 2020 colleges have sought to reduce their reliance on subcontracting, partly in response to policy changes. Strode College, now part of UCS College Group, attributed its 42 per cent fall in starts between 2020-21 and 2024-25 to “planned reduction in sub-contracted delivery”.
This table was updated to remove South Hampshire College Group because a merger meant published DfE figures did not provide a like-for-like comparison.
Reversing the decline
Ministers are trying to change the economics.
The government is fully funding apprenticeship training costs for 16 to 24-year-olds employed by non-levy-paying businesses and introducing a £2,000 hiring incentive.
Employers can also receive £3,000 for recruiting apprentices aged 18 to 24 on universal credit for over six months.
Colleges make up two-thirds of the 331 providers approved to deliver new apprenticeship units, offering shorter, more flexible training.
Foundation apprenticeships, launched last year for 16 to 21-year-olds needing additional help with employability, have also attracted strong college involvement. Of 117 providers offering them, 63 are colleges.
But take-up is slow, with just 160 starts recorded between August 2025 and April 2026, and AoC warns the £2,000 recruitment and progression incentive attached to them “may shift recruitment away from other apprenticeships without increasing apprenticeship numbers overall”.
For over a decade, ministers have urged colleges to deliver more apprenticeships without doing enough to remove the barriers holding them back: stagnant funding, shortages of specialist teachers, compliance risks, EPA bottlenecks, employer reluctance and the higher costs of supporting younger and more vulnerable apprentices.
Colleges must also maintain a broad local offer while competing with ITPs able to concentrate on the most commercially attractive parts of the market.
The question is therefore not whether colleges can stop ITPs ‘nicking their lunch’. It is whether the system gives them enough reason to do so.