Experts voice frustration with levy rules after apprenticeship numbers take another tumble

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Experts yesterday accused the government of failing to listen to growing concerns about the apprenticeship levy, after the latest figures from the Department for Education revealed another drop in starts.

The figures showed 261,200 apprenticeship starts between August 2017 and March 2018, compared with 362,400 in the previous academic year – a decrease of almost a third (28 per cent).

The release coincided with the three-year anniversary of the government’s commitment to achieving three million apprenticeship starts by 2020. A Department for Education report, released last month, revealed that there had been 1,119,600 apprenticeship starts between May 2015 and July 2017. Adding this to the figures disclosed in yesterday’s release brings the total starts since May 2015 to 1,380,800, meaning the government is less than halfway to achieving its aims.

Following April 2017’s significant overhaul of the apprenticeship system, employers with an annual pay bill of at least £3m are required to pay 0.5 per cent as a levy, which they can recoup in training vouchers.

Experts accused the government of failing to respond to concerns about the levy, despite a consistent decline in starts since the charge’s introduction.

“The drop in the number of apprenticeship starts shows that government needs to make apprenticeships a lot more flexible and a lot less bureaucratic,” said Ann Francke, chief executive of the Chartered Management Institute. “This is a transformation – not a tweak – and needs to be much more clearly communicated and managed.”

Jane Gratton, head of business environment and skills policy at the British Chambers of Commerce, added the latest figures were “a clear sign that something is going wrong”.

“The government needs to listen to the business community, and work with us to ensure more people have access to high-quality apprenticeship training, to make the levy system work better for everyone,” she said.

Mark Dawe, head of the Association of Employment and Learning Providers, also expressed frustration with the system, slamming the lack of recognition of the impact the process was having on smaller providers.

“They keep saying it’s all fine while the evidence points the other way altogether. We keep saying ‘for god’s sake, take some action, even if it’s just in the short term’ – especially around the SME market, which has been hit the hardest by the levy,” he told People Management.

But Lizzie Crowley, skills policy adviser at the CIPD, said the data contained some “silver linings”.

The figures showed that, as of 30 April, 69,800 (43 per cent) of the commitments to enter into an apprenticeship were for advanced-level placements, and Crowley felt this suggested that poor-quality provision was being weeded out.

She added that the government should still be concerned by the “considerable drop” in starts. “But I don’t think the government is likely to change anything in the short to medium term with regards to policy,” she toldPeople Management.

Commenting on the figures, apprenticeships and skills minister Anne Milton said: “We had anticipated this drop in the number of people starting apprenticeships. March 2017 was the high point in the use of the old-style apprenticeships that were in many cases not fit for purpose. What matters is the move to the new-style apprenticeship standards.

“The number of people taking up these new, higher-quality apprenticeships has increased rapidly beyond our expectations. Apprenticeships must now be high quality – and we won’t sacrifice that principle to increase quantity.”

Meanwhile, giving evidence to the education select committee in May, education secretary Damian Hinds said the levy was going through a “period of change” and employers were taking time to adjust.

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