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The recent apprenticeship numbers could be better for the government.

On March 29, the government reported a further drop in the number of apprenticeship starts. 194,100 apprenticeship starts were reported in 2017/18. This is a significant drop compared to the same time 2016/17, when there were 258,800 apprenticeship starts. This drop is also not a one-off anomaly. The last year has seen consistent quarter on quarter drops, the most dramatic of which being the stunning 61% drop in starts reported in October of 2017, when they dropped to 43,000 from 113,000.

So, what gives?

There’s been hot debate between all those in apprenticeships provision to figure out the reasons.

Many employers and training providers point to the Apprenticeship Levy and the new rules requiring 20% off-the-job training for all apprentices for the fall in starts. Research released by the Institute of Directors suggests that the Levy is not working all well as it could, with less than one in seven Levy-paying employers thinking it is fit for purpose and less than one in three firms intending to reclaim their full entitlement once the Levy is paid.

Mark Dawe, Chief Executive of the Association of Employment and Learning providers, said that “lots of work still needs to be done selling the benefits to employers.” He also points to the halving of allocated subsidies for non-Levy paying SMEs, traditionally the providers of a majority of apprenticeships.

It is also thought that many employers are saving their Levy cash. The Levy rules make it so companies have access to their funds for a particular amount of time. Many are refusing to spend their entitlement before they either further familiarise themselves with the current system or to save up for larger and more expensive apprenticeships.

Employer representative groups also say that the 20% off-the-job training rule is too restrictive, eliminating one of the incentives employers have to hire apprentices: subsidised labour at a lower cost. Many employers feel it is unreasonable and unproductive to expect employers to pay an employee to be away from their posts for one day a week.

There is also a concern that employers are simply using the apprenticeship program as a form of government-subsidised training for already-experienced employees at higher levels. As an employer, it may seem like a better investment to upgrade skills for a handful of your best employees than to hire a dozen young apprentices at a lower level who may not be around for long. Hence, the smaller number of starts.

Another way of looking at the numbers could offer cause for hope.

A recent analysis of the numbers produced by the Resolution Foundation emphasises a potential decrease in low-quality apprenticeships. Kathleen Henehan and Helena Rose write that ‘drops [in apprenticeship starts] are heavily concentrated among basic level qualifications for older apprentices’. Further, ‘[the] patterns outlined...show that some apprenticeships have been used to subsidise less-intensive forms of employee training, as a substitute for low-pay work.’ In other words, some employers used apprenticeships as a source of cheap, subsidised labour that did not give good training or education. The new 20% off-the-job training rules may make such a practice impossible. Fewer than half of the trainees polled even knew they were classified as apprentices.

The analysis also shows and emphasises the rise in uptake of apprenticeships at a higher level. There was ‘a noticeable and significant growth of 19-24 year old apprentices taking up programmes at Level 4 and higher, but a small drop off for the other age groups at that level.’ Hopefully, this is a sign that higher quality apprenticeship offerings are winning the day.

There has also been criticism of the sector response itself. Sean Williams, CEO of Corndel, an organisation dedicated to helping employers use the Levy, says that the criticism of the government is largely a result of organisations not wanting to invest in staff and comes from providers that don’t want change. There might be something to this view. The way the Levy is designed requires much more attention and involvement from employers. Government may need to do a better job communicating the advantages of the Levy to employers and argue a better case for off-the-job training.

Anne Milton, the Minister for Apprenticeships and Skills, though, has said that the fall in apprenticeships were expected and that it is only a matter of time before employers realise the opportunities the levy makes available. She points to the rise in higher level apprenticeships and the massive increase in degree apprenticeships as signs of the continued appeal apprenticeships have.

Apprenticeships are indeed rising in popularity and going mainstream. It is estimated that in three years’ time, degree apprenticeships will make up 10% of all degrees conferred by universities.

There is also evidence that apprentice performance is rising and there is every reason to believe that performance will continue to grow once employers and training providers become more accustomed to the new system.

Will the government make the changes that employers want or will employers slowly acquiesce to the demands of the reforms? Return to our blog to keep up to date with the latest news and developments. Or follow us on Twitter, Facebook, Instagram and LinkedIn.

See you out there!