Lindsay TalksBy Lindsay Talks - on 24 October 2018
Posted in Apprenticeships

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Lindsay Talks explores the drop off in apprenticeship starts since the introduction of the levy

Lindsay Talks explores the drop off in apprenticeship starts since the introduction of the levy

Despite the successful growth in numbers of apprentices that JTL is experiencing across both its key areas of activity – electrical and heating and plumbing apprenticeships - the huge national drop off in numbers of apprenticeships across the UK is alarming many in the apprenticeships sector. There is understandable concern that the Government appears to be edging back from its much vaunted target of 3 million apprentices in place across all sectors, by 2020.

What has happened and importantly what is happening now to discourage employers and young people from employing and applying for places on apprenticeships? Is it the effect of the Apprenticeship Levy? Are there more barriers in place to discourage apprenticeships than there were? And why is it mainly the small and medium sized businesses that are being ‘turned off’ apprenticeships, whilst larger companies seem to be immune to whatever it is that is making the difference – and a huge difference at that?

Let’s look at some figures and hear what others in the sector have to say.

According to FE Week, there were 341,700 apprenticeship starts reported between August 2017 and June 2018 for the 2017/18 academic year. This compares to 472,500 and 458,500 starts reported in the equivalent period in 2016/17 and 2015/16 respectively.

Stephen Evans, Chief Executive, Learning and Work Institute, comments: “The latest apprenticeship statistics appear to show a new ‘steady state’ of apprenticeship starts of around 20-30,000 per month. In any case, at the Learning and Work Institute we argue the real focus should be on boosting quality and widening access and tackling the barriers to participation that too many groups of people face who would like to take up an apprenticeship.”  We at JTL agree with this focus on quality over quantity and are proud to be striving for achievement rates of 80%.

Simon Ashworth, Chief Policy Officer at AELP said recently: “It’s particularly disappointing to have further confirmation that the Levy reforms have led to a massive drop in apprenticeship starts, which means opportunities are limited for those young people who want a debt-free alternative to university.”

Serious stuff from knowledgeable people. So what is the current funding situation with regard to apprenticeships that so many people seem to have issues with?

Let’s step back a little bit to put this issue in context. Since the Apprenticeship Levy was introduced, companies with a wage bill in excess of £3m contribute to the Apprenticeship Levy.

Companies with a wage bill of less than £3m pay 10% of training costs directly to the training provider, with the government paying the remaining 90%, up to a funding band maximum.

And the Government provides all of the funding for training 16- to 18-year-old apprentices if a company has fewer than 50 employees.

I work in the Heating and Plumbing sector, delivering apprenticeships for young people wanting to start a career in this vital area of the economy in the years ahead. Due to changes in the funding of apprenticeships, funding for Level 2 Apprentices is just £5,000 for the Intermediate Apprenticeship in Plumbing & Heating. That rises to £9,000 for Advanced Apprenticeships in Plumbing & Heating. Funding is more generous for the new apprenticeship standards but key components of these are not yet available to support delivery.

There are definite issues for small companies looking to employ apprentices and the funding simply isn’t attractive enough for many of them. The requirement for them to fund 10% up front is being met by some with a response along the lines of “why bother offering an apprenticeship which requires time at college? Let’s take them on and train them ourselves for free and keep them on the job 100% of the time.”

It's clear that the funding system is still not quite right and the numbers of apprentices overall is still way short of the targets we were led to believe the Government had in its sights.  We’re fortunate at JTL that our board has decided to make Heating and Plumbing one of our key targets in the months ahead.  We are dedicated to attracting as many new apprentices as we can to the heating and plumbing sector and to supporting employers to train them. 

About the author:

Linsday Talks

Linsday Talks is a Product Manager for Heating & Plumbing at JTL.

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