Total apprenticeship starts in May, June and July fell by 61% compared to the same period last year, according to provisional figures published by the Department for Education (DfE) as part of the Statistical First Release; these include the apprenticeship starts after the levy system began on 1 May.
All apprenticeship starts from May (with the exception of 16- to 18-year-olds at companies with fewer than 50 employees) have, for the first time, involved a mandatory financial contribution from the employer, either from the apprenticeship-levy account or the 10% co-investment.
The DfE said: “Between February and April 2017, there was a 47% increase in apprenticeship starts compared to a year earlier — 174,100 and 118,800 respectively.
Between May and July 2017, which is the fourth quarter of the 2016/17 academic year, apprenticeship starts have decreased to 43,600 from 113,000 a year earlier — a fall of 61%.”
Responding to the dramatic fall in starts since May, a DfE spokesperson said: “Our apprenticeship reforms have put control back into the hands of employers, so they will gain the skilled workforce they need to compete globally.
"We know that the last year has been a period of huge change for employers, but it is right that they are taking their time to plan ahead and maximise the opportunities the apprenticeship levy can bring.”
Mark Dawe, chief executive of the Association of Employment and Learning Providers, told FE Week: “Sadly we saw these numbers coming long before the levy even started, because of the way the new funding system has been designed.
"Until we see the September starts, we don’t know whether the 3 million target is under threat, but the numerical target isn’t really important here.
"What is needed are changes that will restore incentives for employers to recruit young apprentices and a guaranteed minimum budget for non-levy payers’ apprenticeships, which will ensure that there are opportunities in the many areas of the country without large employers.”
Neil Carberry, CBI managing director for people policy, said: “This disappointing data will come as no surprise to companies that have repeatedly made clear that the current design of the apprenticeship levy system is not effective.
Businesses believe in apprenticeships, but there can be no argument now; reform of the levy system is needed urgently to ensure its success.
“Firms are still having to adjust to the new system against difficult timescales, but the challenges of the levy run deeper than just a timing issue.
"That’s why the CBI has consistently said that for the levy to really meet business and learner needs, more flexibility is vital, so firms can deliver high-quality training.
“The CBI will continue working with the Government to deliver an apprenticeship system that meets the skills needs of companies and opens up careers for young people.”