In the past year, the number of apprentices in England has continued to drop despite the government’s introduction of the new apprenticeship levy. As a result there are complaints of additional costs being incurred and a failed rollout.
The system has been deemed overly bureaucratic and complicated by many, which has stifled adoption rates. Simultaneously, changes in the classifications of apprenticeships and their delivery are significantly reshaping the environment for further education (FE) providers and recipients.
However, we believe the marketplace is full of opportunity and that apprentices contribute significantly to the UK business landscape and our ongoing competitive advantage.
Evolution of the marketplace
This shifting landscape for apprenticeships is creating a distinctly different marketplace as traditional FE providers are seeing new competition from institutions that have not traditionally been players in this market. We’re seeing a range of private sector providers, universities, and private employers all starting to enter this market.
Currently, it seems that most early adopters hail from the public sector, indicating a better ability to identify opportunities presented by the levy. This trend is coupled with a number of large graduate employers reducing their graduate intake and increasing apprenticeships as the levy financially underpins their recruitment.
We’re also seeing prestigious Universities broadening their educational offering through MBA courses funded via apprenticeship finance, in a move that is further blurring the lines between vocational and higher education.
The MBA programs offered at UK universities are notorious for being expensive and through the accessibility provided by the levy we may see an increase in development of middle managers rather than focusing solely on high achieving junior staff.
Notably, this marks an era of great opportunity for FE colleges and independent training or education providers. We are looking forward to seeing more of these organisations make use of the benefits that the levy brings and the opportunities it will present for their visibility and relevance to society.
For these apprenticeship providers however, there still exists concern around a lack of funding and interruptions to cash flow caused by payment cycle inconsistencies. This is where securing funding that bridges these gaps can help.
We understand that these funding dips are massively detrimental to the continued operations of providers and have developed a tailored product that will support them to overcome these payment cycles.
Despite the financial challenges we expect the marketplace will continue to evolve as it begins encompassing a larger amount of private sector firms adopting apprenticeship schemes, and SMEs utilising the benefits of a newfound skilled workforce.
In addition, we are likely to see further developments and enhancements of specialised courses that can benefit individuals looking to further their training in niche subjects or retrain in order to assert their relevance to their employer.
The apprenticeship landscape is rife with opportunity and to ensure that apprentices continue to deliver their new found skills to the workplace, we hope organisations will make use of the levy to facilitate their training. As with most education policies, the changes will take time to be fully realised.
However, we’re certain that for the future success of the UK’s economy, new training formats need to be supported. In turn, successful apprenticeships will underpin GDP growth and economic success. Key to implementation of FE programs will be proper collaboration and ensured funding.
Chirag Shah, CEO of Nucleus
About Nucleus: Nucleus Commercial Finance provides alternative finance for businesses. The experienced team takes a solutions-based approach to structure finance deals that fit each individual business. This tailored and transparent approach combines the flexibility of an alternative lender with the stability and product range of bank finance, spanning overdrafts, cash flow finance, invoice finance, property finance, asset funding and construction finance. Click here for more details.