New figures published by the Department for Education show that the number of young people starting new apprenticeship roles is significantly lower than the same period in each of the last two years.
The January 2018 statistics cover the latest monthly apprenticeship starts, apprenticeship service registrations and commitments and apprenticeship levy declared information – so generally provides headline statistics on the use of the apprenticeship service. The main statistics cover apprenticeship service account registrations (ASAs) and the number of commitments up to November 2017, where a new apprentice who is expected to start has been recorded in the system.
The latest report shows that the number of new apprenticeship starts is down by 27% compared with last year, something the National Education Union (NEU) has described as “very worrying”.
Dr Mary Bousted, Joint General Secretary of the National Education Union, said:
Today’s figures showing a further drop in apprenticeship starts, are very worrying for the government, for employers and for UK productivity.
The NEU supports the apprenticeship levy. Given the very poor track record of UK employers in providing vocational training for their employees, it was right for the Government to call their bluff and to insist that they made a contribution to developing workplace skills and productivity.
Government needs to act so that apprenticeship starts improve from their current levels. The Government must ensure that the apprenticeship ‘brand’ is not tarnished by poor quality workplace training, non-payment of the minimum apprenticeship wage and discrimination against women and BAME workers.
The number of people starting apprenticeships fell to 114,000 between August and October last year, down from 155,700 in the same period the year before. That came after a 59% drop in the previous three months following the introduction of the apprenticeship levy last April.
The largest drop came in what are known as ‘intermediate’ apprenticeships, the most basic level, which dropped 38% to just 52,000. The highest level – degree apprenticeships – meanwhile increased by almost 27% to 11,600 in the same period. Apprenticeship schemes for adults were the worst affected overall, falling by more than 30% compared with the 20% fall for young apprentices.
Critics of the scheme say employers are being deterred from creating new apprenticeship roles due to the higher costs and complexity of the new scheme. For a business with a payroll of more than £3m, the charge is 0.5% of the payroll to go towards the apprenticeship levy. 20% of the training has to be carried out away from the employer and those with 50 or more staff have to contribute 10% of the overall cost.
Seamus Nevin, the head of policy research at the Institute of Directors, said the government is at risk of failing to reach its own target of getting 3 million people to start apprenticeships by 2020. He said:
Clearly the new system has failed to take off. The levy can be difficult to navigate and many employers still struggle to comprehend how the system is meant to work.
The IoD said that more than 10% of its mostly smaller company members who pay the levy see it as extra tax and they are no longer able to afford to offer any new apprenticeships as a result.
This is because the government is no longer fully funding apprenticeships – particularly those for young people – a move that has been heavily criticised. Mark Dawe from the Association of Employment and Learning Providers said:
For a government committed to improving social mobility, ministers have to be really concerned about the continued drop in starts for both young people and at lower levels.