Estimated reading time: 5 Minutes
28 February 2019
On 05 March the Minister for Economy and Transport will be making a statement in Plenary entitled: Apprenticeships: Investing in Skills for the Future.
Welsh Government appears on course to meet and even exceed its target to create 100,000 apprenticeships.
However, high numbers mean the programme is experiencing funding ‘pressure-points’ with Welsh Government managing demand via restrictions and a set of apprenticeship priorities.
It has explained that ‘difficult decisions’ may need to be made in the future on the support offered to certain sectors and occupations.
In the meantime, most apprenticeship providers are achieving success rates at or above national benchmarks, although Estyn have stated that ‘few’ providers of Higher Apprenticeships have been managing the programmes well.
Welsh Government wants to create 100,000 apprenticeships by the end of this Assembly term and for more of them to be higher level
In its 2016 election manifesto, Welsh Labour proposed the creation of at least 100,000 apprenticeships, open to all-ages by the middle of 2021. The apprenticeship programme would align ‘the skills people gain and the skills the economy needs’.
The detailed strategy for achieving the manifesto commitment was published in 2017. Amongst other things the strategy signalled an intention to shift effort toward increasing the numbers undertaking the higher level, more challenging apprenticeships, including introducing Degree Apprenticeships.
Welsh apprenticeship policy breaks the link between what employers pay in Apprenticeship Levy and what they can get back
In Wales organisations that meet the criteria set by UK Government must pay the Apprenticeship Levy. In England such employers can then get their Levy money back by spending it on apprenticeships for their employees.
In Wales the direct link between what such employers pay in Levy, and what they can get back is broken.
Instead, Welsh Government allocates apprenticeship funding and distributes it via contracts to 19 work-based learning providers who are a mixture of further education colleges and private companies. For Degree apprenticeships, money is provided to the Higher Education Funding Council for Wales who pass it on to universities.
There are four different types of apprenticeship in Wales, all at differing levels of challenge
These four types are:
Welsh Government is on course to meet its 100,000 target and if current demand continues, may be able to go much further
At the time of writing the data shows that 24,115 apprenticeship programmes were started in the academic year 2016/17, plus another 31,360 in 2017/18 (success rates are explored below).
This means that at the start of summer 2018 Welsh Government is already just over half-way to hitting its 100,000 target.
The chart below is for illustrative purposes only and does not represent any actual Welsh Government quarterly targets, but it compares actual performance when compared to a notional quarterly target of 5,263 starts (the 100,000 target divided equally by the 19 quarters available to Welsh Government to achieve it).
The number of Higher Apprenticeship starts is broadly stable despite the Welsh Government’s aim of increasing their numbers
A key aspect of Welsh Government’s apprenticeship strategy is to deliver fewer Foundation Apprenticeships, and increase the number of Apprenticeship and Higher Apprenticeship starts.
The chart below shows little sign so far of a fundamental shift in favour of Higher Apprenticeships.
It also shows that the surge in 2017/18 Q1 starts seen in the chart above was driven almost entirely by Foundation and Apprenticeship starts.
High demand could be impacted by the amount of funding available – Welsh Government says difficult decisions may be needed
Funding for the apprenticeship programme comes from the Welsh Government’s budget and from European funding.
Welsh Government expects that all of its 2018-19 budget for apprenticeships will be spent and that it anticipates bringing in increased amounts of European funding to meet high demand (or replacement no-deal funding from HM Treasury).
Welsh Government has said that:
the increasing demand for apprenticeships could lead to us having to make difficult decisions in relation to the support offered within certain occupational sectors/levels.
For next year’s 2019-20 budget Welsh Government has allocated £82 million to the apprenticeship programme and expects to invest, in total £115 million including European (or no-deal HM Treasury) funding.
Funding for Degree Apprenticeships is not additional money and instead has so far been found by transferring money from the wider apprenticeship programme. To deliver its £20 million commitment to Degree Apprenticeships another £12 million will need to be found next year, either transferred from the wider apprenticeship programme or from elsewhere.
To manage funding, Welsh Government prioritises apprenticeship starts by apprenticeship type, apprentice age and industry sector priority
Welsh Government manage the funding of the apprenticeship programme via:
- the concept of priority and non-priority sectors;
- by contractual controls which set targets and restrictions for the work-based learning providers using sector priorities, apprenticeship types, and apprentice ages; and
- using their contracts with work-based learning providers to set them an overall order of priority for delivering apprenticeships, again based on the above categories.
Welsh Government explained they were set in the following order for 2017/18:
Most apprenticeship providers are achieving acceptable success rates but there have been concerns raised about most Higher Apprenticeship providers
In a 2018 report commissioned by the Minister for Education, Estyn stated that:
Only a few work-based learning providers manage the higher apprenticeship programmes well and have secured consistently strong outcomes
Welsh Government monitors the success rates of each of the providers and compares them using a traffic light system against a national benchmark.
The table below summarises how many providers in December 2018 were on a red, amber or green traffic light rating for each type of apprenticeship. Red means the provider is achieving a success rate below 75% of the national benchmark.
It can be seen that more providers of Higher Apprenticeships are currently receiving a red or amber traffic light meaning success rates are below the national benchmark.
Article by Phil Boshier, Senedd Research, National Assembly for Wales