Calls for greater local flexibility over apprenticeships funding to stem 'dramatic fall' in apprenticeship numbers

24 October 2018

Apprenticeships have fallen by an estimated 30% in Leeds City Region over the past year, according to a new report on the City Region labour market published by the West Yorkshire Combined Authority.

Dramatic fall

The research highlights the dramatic fall in the number of businesses offering apprenticeships since the introduction of reforms to the UK apprenticeship system - including a mandatory apprenticeship levy for organisations with a payroll of £3 million and over, intended to be used by those firms to create apprenticeship opportunities either for new staff or to upskill existing employees in line with the Government's target of three million additional apprenticeships.

According to an Open University study published in April this year, only £108 million had been drawn down from the £1.39 billion paid in by levy-paying organisations to invest in apprenticeships one year on from the introduction of the levy.


More productive

In proposals submitted to Government ahead of the Autumn Budget on 29 October, the West Yorkshire Combined Authority has called for this unspent levy money to be retained within the region, so that support can be put in place to help both small and larger firms create apprenticeships to address their skills needs and become more productive.

The Government has recently announced a relaxation of the apprenticeship levy rules to give levy-paying businesses greater flexibility in the way they use their levy payments, including directing up to 25% of funding towards smaller companies in their supply chain.



Cllr Susan Hinchcliffe, Chair of West Yorkshire Combined Authority and Leader of Bradford Council welcomed this relaxation of the levy rules, and the Government's confirmation of additional resources to fast-track apprenticeship standards, making it easier for training providers to offer apprenticeships in areas that will address key regional skills gaps. She added though, that the measures did not go far enough.

Cllr Hinchcliffe said: "As a region which has traditionally seen higher levels of participation in apprenticeships than other parts of the country, the dramatic fall in the number of apprenticeships offered in Leeds City Region has serious implications for our workforce and future productivity.

"Any measures that make it easier for businesses large and small to take on apprentices must therefore be welcomed. However we need greater flexibility and resources in the system now, not in two years' time.

"The clear message we've been hearing from businesses, only 20% of which now offer apprenticeships, is that they need more help to adjust to the new apprenticeships system. A flexible, devolved local funding approach could enable our local enterprise partnership to provide more tailored support to help businesses make the most of the existing levy system and develop the skills they need for productivity and growth.

"With Brexit fast approaching and as more decisions historically taken in Whitehall are being devolved to local leaders (though frustratingly not yet here in Yorkshire), the importance of building that flexible, responsive labour market which is the lifeblood of our economy has never been more pressing."

The Leeds City Region Labour Market Report 2018 also noted that pupils who receive free school meals are much less likely to participate in apprenticeships than other pupils - mainly because less advantaged pupils are less likely to achieve the strong GCSE passes in Maths and English required for an apprenticeship.


Pledging commitment

Cllr Hinchcliffe added: "For decades, apprenticeships have been the route to a great job and a great life for many, but this research highlights that we need to do much more to rebuild the link between apprenticeships and social mobility. Apprenticeships just aren't as inclusive as they need to be at a time when everyone, central and local government alike, is pledging commitment to creating an economy that works for everyone.

"We're trying to do our bit, thorough our efforts to build links between schools and employers and inspire young people to gain the skills and qualifications they need for an exciting, fulfilling career. Through our apprenticeship grant for employers, we've helped small and medium-sized businesses create over 4,000 apprenticeship opportunities so far.

"With a more flexible, devolved funding approach that allows us to develop local responses to local issues, we could do so much more than the current one-size-fits-all centralised approach allows us."



Identify Web Design in Wakefield is one businesses which has accessed an apprenticeship grant from the Leeds City Region Enterprise Partnership (LEP) to create apprenticeship opportunities.

Liam Webster, Managing Director at Identify Web Design, said: "We created an apprentice position because we were in the middle of requirements. When we started out we weren't quite ready to take on an experienced account manager, but wanted someone who was hungry for success that we could shape to work in line with our company values and visions. Had the apprenticeship grant for employers (AGE) not been available from the LEP it is unlikely that we would have been able to afford to go down the route of hiring an apprentice. Having an apprentice has enabled us to grow our workforce with individuals trained in the skills we need. The extra hands also means we are able to take on more work."

"Apprenticeships work really well for us - we've successfully taken on two apprentices and both are now into full time employment with us. Jordan who was the second apprentice we took on, has progressed significantly both in terms of skills gained, contribution to the business, and also personally. He now manages a number of wide ranging customer accounts independently (with the support of the development team), and is confidently growing his own customer base."


Skills needed

Jordan Beaumont, Account Manager and former apprentice at Identify Web Design, said: "Being an apprentice was a great way to ease into my career. I'd never worked in an office environment prior to this, or dealt with clients. When I joined the team here they were great in getting me up to speed quickly and showing me the ropes. My apprenticeship gave me the skills I needed to do the job I do today.

"In my three years here I've gone from dealing with one or two small clients to working with multi-million pound companies and brands, developing new websites and advertising campaigns. Without the apprenticeship scheme I doubt I'd have been able to break into this industry and have such success or enjoyment of my work."

Find out more about how businesses with 50 or fewer employees, wanting to recruit their first apprentice can apply for a grant of up to £2,000 from the LEP