Tony Allen, CEO, AAS Ltd

“You STILL require 3 million apprenticeship starts Minister?”

So, the latest apprenticeship vacancy advertisement stats have been published. These show a drop from an average of 15,000 or so a month to just 70 in May….yes 70!

Now I suspect that something has gone wrong with the data collection and that 70 is not the true figure, (at least I hope that it isn’t!) but seeing the May figure in such stark contrast to the preceding months has cause me to reflect on what is happening with apprenticeship recruitment at the moment.

From my own entirely anecdotal perspective, in talking to quite a few employers over the last few months, there is no doubt that two things have happened to the normal pattern of apprenticeship recruitment, and therefore published vacancies. Firstly, there was bulge in recruitment in March / April. There are a number of reasons for this, including those employers who wanted to get up and running, or increase the size of their programme ahead of the levy coming in. Secondly, there were those who wanted to recruit as many apprentices as possible before they were forced to make any financial contribution. So, no real surprises that March and April showed some ‘frontloading’ of recruitment.

However, the really interesting thing is what government expected to happen in May. There was an earnest hope that the levy would bring its own recruitment ‘bounce’ from the start. Certainly this is what officials were expecting to see. So the dramatic reduction in advertised vacancies, (even if 70 is wrong, it will not be anywhere near 15,000), will therefore come as an unpleasant shock. Why? Well once again there are two reasons, and why for the first time we should start to think about whether the 3 million target, which I for one have always taken as a ‘given’, might now just be at risk.

Employers are really making use of the fact that they can accrue their levy funds for two years before spending them. Some employers are guilty of, even now, knowing very little about the levy. However, one thing that nearly all of them know is that they have two years to spend it! For many this means that there is no rush. In the last month I have spoken to employers who are not recruiting apprentices until September, December, March 2018, June 2018, and in one case September 2018! From their own perspective, the opportunity to properly align their apprenticeship programme with their recruitment, L&D and talent management programmes is ‘a no brainer’, and the Government has given them two years to do it! This was always a ridiculously long period of time, and one that I think government might well have to review.

I have written about the chaotic situation regarding SME allocations here before, so I will not repeat myself too much! However, it is worth saying that allocating £440m out of a £3bn fund for SMEs is ridiculous. Now it is true that the department will have no idea how much levy money is actually going to be spent over the next year, so therefore being cautious with SME allocations makes some sense. However, as we can be fairly confident that a significant number of levy paying companies are delaying their apprenticeship starts, surely this means that the Department can afford to take what seems to me to be a very small risk, and allocate more money to SMEs, so helping to solve their procurement problem.

Now does all of this really matter? I mean, so what if we do not achieve 3 million starts by May 2020? Well from a political point of view the 3 million might be meaningless anyway! After all it was a Cameron target set in what now seems a very different political world. Frankly, who knows who will be running the country in May 2020, and whether they will care about 3 million apprenticeship starts!

However, more seriously, I think that it is in our national interest to have an apprenticeship programme of sufficient size to really make a positive contribution to the skills and economic wellbeing of the UK. Now whether that figure is 3 million, 4 million or 5 million, who knows, but I do support the idea of some sort of ‘target’, providing that the apprenticeships are matched in number by their quality.

There is enough funding for this. The levy will bring in circa £3bn per year, getting on for double what was spent in achieving 2.4 million starts to 2015. I know that standards draw down much higher rates of funding in the main, and therefore cost more, but if only government could get itself sorted out and make some common-sense decisions about how the funding is allocated, then we can get back on track.

3 million or not 3 million….at the moment, that really does remain THE question!

Tony Allen, CEO, AAS Ltd

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