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Will a 27% drop in apprenticeship numbers force a government policy rethink?

There were 114,000 new apprentices between August and October, 41,700 fewer than in the same period in 2016

There is renewed and increasing pressure on the government to implement a complete overhaul of apprenticeships, following a significant drop in the number of young people opting to follow that route.

In the fourth quarter of 2017, the fall in apprenticeship starts came in at just under 27%, which is a further blow to the target set in the last parliament of three million apprentices by 2020.

There were 114,000 new apprentices between August and October, 41,700 fewer than in the same period in 2016.

The number of people starting on an apprenticeship fell to 114,000 between August and October. That figure was down from 155,700 for the same period of 2016. The introduction in April 2016 of the new Apprenticeship Levy is thought to be behind the drop, which has seen a huge drop of 59% in the three months to August.

Critics are pointing fingers at the Levy, claiming that it is putting off employers creating roles for apprentices because of higher costs, and increased complexity in hiring. In short, any business with a payroll in excess of £3m pays a fee of 0.5% of that to the Apprenticeship Levy. Employers with more than 50 staff are required to contribute 10% towards the cost of the 20% of training that is completed away from the employer’s premises, for example at the local FE college.

The sharpest fall in the final quarter last year came from “intermediate” apprenticeships – the ‘entry’ level. Numbers fell 38%. In contrast, “higher” apprenticeships (taught at levels 4-7, which covers Bachelor and Master’s levels) saw an increase of 27%.

The Levy seems to be more complicated for potential employers to translate into their own businesses, and has not taken off as the government hoped, with the threat now that the three million target might not be met.

Employers are also concerned that they are fully footing the bill, covering the difference in cost since the government no longer fully funds apprenticeships, and they feel the government is not listening to their growing concerns.

Just as worrying from a business perspective for many as the decline in starts, and employers not being able to fill their skills gap, is the effect that losing so many opportunities will have on the next generation of skilled workers.

Some worry that the impact of the Levy, and the subsequent decline in numbers, risks going against all the reasons reforms were introduced initially. It was about quality, and putting control with the employers, to be able to steer the programmes towards the skills they would need, and to write programmes in conjunction with the local colleges.

The last year saw a significant change for business and the government believes it will take time to adjust. It could be that the fall is down to the removal of apprenticeships of a lower quality, those taking advantage of seemingly cheap labour, without paying their share of the apprenticeship in full; the learning and experience on the job.

With those vacancies gone, the government believes the programme can still be successful.

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