The government has released apprenticeship starts data and an accompanying FE & Skills report for the final academic quarter (May-July) of 2017 and therefore for the full year for 2016-17. The headlines are reporting a 61% drop in starts compared to the same quarter last year and are implying that this is due to the introduction of the apprenticeship levy. This 61% figure needs to be taken in the context of a Q3 47% increase compared to quarter 3 the previous year. In other words as providers and employers (especially non-levy employers) brought their starts forward as far as possible before the uncertainties of non-levy allocations hit, there was a Q3 bulge in starts causing a correction in Q4.
But this isn’t the whole story. A comparison of full year figures (which even out the bulge) shows that starts were down 2.5% nationally, 3.7% across the South East and down 1.6% down across Sussex. This is well below the trajectory required to hit the government’s 3 million starts target but it isn’t a disastrous 61% drop either. So there has been a slowdown, believed to be due to levy paying employers starting to use their levy pots slowly, and a slowdown in non-levy activity as providers grapple with the uncertainties of allocations to the end of December and the procurement exercise for January 2018 onwards. We would urge the Government to heed these early impacts of the reforms and look carefully at the wisdom of the 20% of-the-job rule; notifying providers about their January 2018 allocation the months before it takes effect; non-levy co-investment required by employers and the forthcoming ’empowerment’ of non-levy employers to manage their apprenticeships via the Apprenticeship Service from April 2019.