Apprenticeship Starts and Levy Statistics: August 2018 – Sector Response

Today’s (16 Aug) apprenticeships statistics, covering the latest monthly apprenticeship starts, apprenticeship service registrations and commitments, and apprenticeship levy information:

There have been 315,900 apprenticeship starts reported to date between August 2017 and May 2018 for the 2017/18 academic year. This compares to 457,200 and 420,800 starts reported in the equivalent period in 2016/17 and 2015/16 respectively.

As of May 2017 there were significant structural changes to the apprenticeship funding system including the introduction of the apprenticeship levy and Apprenticeship Service.

As shown in the January 2018 release of this publication, 91.7 per cent of those who had PAYE schemes with apprenticeship levy declarations in England of over £150,000 had registered on the Apprenticeship Service.

These firms have two years to spend their funds and as the new system becomes more established, such changes are likely to significantly impact on apprenticeship starts being reported.

As at 30 June 2018, there have been a total of 14,500 ASAs registered. Please note that the date of registration is the date the apprenticeship service account first registered their Pay As You Earn (PAYE) account number and a legal entity in the digital apprenticeship service system. As at 30 June 2018, there have been a total of 187,200 commitments entered into the apprenticeship service. Of these, 177,600 were fully agreed.

Dr Fiona Aldridge, Assistant Director at Learning and Work Institute said:

“As young people receive their A-level and GCSE results and consider their next steps, it’s vital we ensure that they have a strong and clear set of options to continue learning. We are disappointed to see that opportunities to ‘earn while you learn’ remain below 2016 levels, with fewer than 100,000 young people having started an apprenticeship since August 2017. As the government continues to review its apprenticeship reform programme, it is critical that measures to improve education and employment opportunities for young people are at the forefront of their thinking.”

AELP chief policy officer Simon Ashworth said:

“On A level results day, it’s particularly disappointing to have further confirmation that the levy reforms have led to a massive drop in apprenticeship starts which mean opportunities are limited for those young people who want a debt-free alternative to university.  The picture looks no better for those getting their GCSE results next week who will want to start earning while learning instead of staying on in sixth form or college.

“When ministers return from their holidays, they really must get a grip on this if they are serious about social mobility and improving ‘home grown’ workforce productivity in a post-Brexit economy.”

A decrease in the number of apprenticeships by more than 150,000 could be due to the apprenticeship levy introduced by the government, say leading accounting, tax and advisory firm Blick Rothenberg.

“The Government levy was introduced to stimulate the number of apprenticeships that were taken up but it appears to have had the reverse effect,” said Andrew Sanford, a partner at the firm.

He added: “It is disappointing that the majority of employers regard the apprenticeship levy as a tax rather than a means of providing accessibility for training the young. Urgent reform of the levy system is required in order for the government to reach its stated aims.”

Andrew said: “A-level results are announced today but a backdrop to these results is the fact that between August 2017 and April 2018 there were 290,500 apprenticeship starts in England which was 156,400 fewer than in the same period in 2016/17.

“The fall in the number of apprenticeships is at odds with the stated government aim of funding 3,000,000 placements by 2020.”

He added: “For those students getting their A-level results, these statistics will appear alarming. One possible reason for the decrease is the introduction of the apprenticeship levy which was meant to stimulate the number of apprenticeships but initial results appear unfavourable.

“The apprenticeship levy is charged on all payrolls greater than £3 million at a rate of 0.5% on gross salaries.”

Andrew said: “It is intended that the levy charged is then available for the employer to drawdown for available apprenticeship training. However, the level of take‑up, as evidenced by the statistics above, has not reached the levels anticipated by the government.

“For a number of employers there is not an available programme which fits the requirements of the employer to train their staff. It is not plausible for smaller employers to develop a bespoke programme that can gain apprenticeship funding.”

He added: “The apprenticeship levy requires approximately 20% of time at work to be spent on ‘off‑the‑job’ training. However, in many trades and professions, on‑the‑job learning is the best form of training and this prevents a number of training schemes being eligible to the apprenticeship levy funding.

“There is a large degree of administrative complexity in obtaining levy funding and, accordingly, many employers are simply paying the levy.”

Details

This publication provides headline experimental statistics on the use of the apprenticeship service. These include apprenticeship service account registrations (ASAs) and numbers of commitments (reported to June 2018), where an apprentice who is expected to go on to start has been recorded in the system.

Additionally, monthly apprenticeship starts information for the first 10 months of the 2017 to 2018 academic year are also presented (reported to May 2018).

For more further education (FE) statistics, please refer to the FE and skills statistics publication, and the FE data library.

We may adjust the content and timing of these statistics, depending on user feedback and data reporting.