A report published earlier this month by the National Audit Office (NAO) says the Department for Education has some way to go before it can demonstrate that its apprenticeships programme is achieving value for money, with the number of apprenticeships currently below pre-reform levels.

In 2017, the Department implemented several changes to this programme to shift the focus towards meeting employers’ needs, improving apprenticeship quality, and making the programme more employer-funded.

This included a levy scheme whereby larger employers pay 0.5% of their annual pay bill, which they can reclaim along with a 10% Government top-up.

The Department also successfully launched an online apprenticeship service for employers, despite the significant challenges involved.

In its report, the NAO says that since introducing its reforms, the Department has improved how it assesses the benefits of the programme but has not set out clearly how it measures whether the programme is boosting economic productivity, which is the ultimate aim.

“Since funding reforms were introduced, apprenticeship starts have fallen substantially; the introduction of the levy also significantly changed the pattern of apprenticeship starts.

There was a spike in starts in April 2017, before the reforms took effect, but the number of starts fell after this and has not recovered to previous levels.

"Some of this change may be explained as indicating a move away from apprenticeships that do not meet quality requirements, such as apprentices spending at least 20% of their time doing off-the-job training.”

The number of starts in 2017/18 was 375,800, 26% lower than the 509,400 starts in 2015/16. “As a result, the rate of starts would need to double for the Government to meet its target of 3 million new starts by March 2020, which it is very unlikely to achieve.

"Furthermore, the take-up of levy funds is below what the Department expected; in 2017-18, levy-paying employers used 9% of the funds available to them to support new apprenticeships, equating to £170 million of
almost £2.2 billion available.”

The NAO (www.nao.org.uk) report concludes with concerns about the long-term financial sustainability of the programme, and it recommends that the Department and HM Treasury should determine what action they can take to deal with the risk of overspending, should demand pick up in a way to meet the programme’s objectives.

It also urges the Department to set out clearly how it measures the impact of the programme on productivity, and to indicate the level of impact that it is aiming to achieve.

Amyas Morse, head of the NAO, said: “Despite making changes to the apprenticeships programme, the Department has not enticed employers to use the available funds or encouraged enough potential recruits to start an apprenticeship; it has much more to do to meet its ambitions.

“If the Department is serious about boosting the country’s productivity, it needs to set out clearly whether its efforts are on track to meet that aim.”