We are at a critical stage in terms of where the government goes with its apprenticeship programme. It has been shot through with problems since the levy was introduced in 2017. Applied to employers with an annual wage bill above £3m, their contribution was meant to help fund three million new apprenticeships.
Yet concerns now proliferate about where the money is being spent and how much is available, particularly for non-levy payers, most of them small businesses crucial to lower-level apprenticeships—and to economic growth. In addition, there is still a continued month-on-month decline on the pre-levy figures for new apprenticeship starts. Education Secretary Damian Hinds has now admitted the nebulous three million target is out of reach.
Of course, it is crucial to encourage provision of apprenticeships. But they must be of the right kind—and the system must work properly.
The National Audit Office told ministers in March there was a clear risk the apprenticeship programme is now financially unsustainable. Meanwhile, the Institute for Apprenticeships and Technical Education has warned of an overspend of £500m this year. Apprenticeships Minister Anne Milton said in January she thought the budget would be “alright until July.” Yet when I questioned her in parliament in late June we were told that she was “aware of the budgetary pressures on the system” but no real assurances were forthcoming.
A major worry is the dramatic decline in uptake of Level 2, GCSE-equivalent apprenticeships since the introduction of the levy, down by more than 40 per cent in the first six months of 2018-9, compared to 2016-7. There has been an increase in certain higher-level apprenticeships. But while it is important to scale up higher and degree-level vocational training (tiers 4-7), levels 2 and 3 are crucial, for example in hospitality and tourism and also in health and social care. These service sectors will be essential growth points in the 2020s and apprenticeships of this kind are critical for my constituency in Blackpool, and for many other left behind towns across the UK. Indeed these are vital areas for our economy more widely. Whatever else happens with Brexit or automation, we will need to retrain millions of adult workers as the skills landscape changes.