The Rise…
Every picture tells a story, yet this picture barely articulates the turbulence and turmoil of the apprenticeship sector since the launch of the levy. Back in 2014/15, when I was working for a large apprenticeship training provider, there were approximately 700 training providers within a rapidly growing marketplace; 2 years later (October 2016) FE Week reported that “a total of 1,023 providers received direct SFA funding this academic year (2016/17), up from 984 at the start of 2015/16.” By the time the apprenticeship levy was introduced, the ESFA reported that “almost 75 per cent of applicants to the Register of Apprenticeship Training Providers were successful. A total of 1,708 providers made the grade out of 2,327 applications” (Source: FE Week) and on 15th March 2017, it was confirmed that 1,303 of providers on the list were ‘Main Providers.’
Here at LX Group, we’ve been tracking the rise and fall of apprenticeship providers since the launch of the levy in 2017. Our analysis shows that provider registrations grew to 2,157 (all provider types) by February 2018, peaking at 2,347 by December 2019, before steadily decreasing ever since – even before Covid accelerated matters. At 1st April 22, provider registrations were at 1,726, almost exactly the same as when the register of apprenticeship training providers first launched five years ago.
The Fall…
There was a high degree of skepticism in the sector when the levy and the new register initially launched; the system was built on bureaucracy, compliance and multiple layers of administration – and an eye-watering number of new partners were required simply to make the system work. Over-layering all of this was the new digital apprenticeship service – a gov.uk platform enabling the ‘buying, selling and management’ of apprenticeships, designed to enable ‘self-checkout’ of apprenticeships and to bring together the buyer, seller and the apprentice (as well as the Government). A great idea in principle – but one which proved not to be as easy as ‘scan and go.’
The sector pushed on and so did the policy makers; apprenticeship Standards replaced apprenticeship Frameworks; enter Universities with Degree Apprenticeships (largely unaware of the rules of the game); Pass or Fail moved to End Point Assessment Organisations and a new Ofsted Framework (EIF) was introduced. These were just a few of the tectonic shifts – the kinds of shifts that many businesses would fail to negotiate with or without a global pandemic.
Policy makers have now overhauled the apprenticeship delivery system to improve the quality of the programmes and to increase outputs. It seems to be having the opposite effect; on 1st April 2022, FE Week announced that “the overall achievement rate for all apprenticeships hit 57.7 per cent in 2020/21. The overall drop-out rate for apprenticeships was 41.3 per cent in 2019/20 and 41.2 per cent in 2020/21.” These figures are catastrophic by anyone’s standards – imagine the uproar if, for example, ‘A’ Level drop-out rates were over 40 per cent, rather than the current figure of around 10 per cent! But why are apprenticeship completion rates so low? Possible explanations could include the following reasons or factors:
| Training Provider | Employer | Apprentice |
| Gone out of business | Gone out business | Left their job by choice or redundancy |
| Lack of skilled delivery staff | Business targets/orders are priority | No career progression |
| Lack of progress monitoring | Lack of commitment to training | No real interest in the job/career |
| Lack of apprentice development | Lack of time to develop apprentice | Offered of more money elsewhere |
| Lack of careers advice and support | Financial constraints/pressures | Relocated/moved home |
| Poor quality training | Low apprentice pay | Change in personal circumstances |
| Poor training experience | Lack of career progression | Too demanding/lack of time |
| Lack of cohesion between parties | Lack of recognition/incentives | Not committed |
| Ineffective delivery model | Non-conductive work environment | Financial constraints/pressures |
The Complex World of Apprenticeship Training Providers
Life has become incredibly complex within the world of apprenticeships. Delivering a holistic and wholesome apprenticeship experience is proving increasingly hard work against the backdrop of compliance, administration and constantly changing political environments. Juggling the balls of apprentice, employer, subcontractor and end point assessor management is every training provider’s bread butter now; continuing to engage and build relationships with regulators such as the ESFA, IfATE, Ofsted and Ofqual is simply further burn.
So why do it? The reasons why providers enter and exit the marketplace place are not clear, but our experience suggests strongly that the top five reasons for entry are:
- A potential commercial opportunity to offer niche provision
- Provision does not yet exist or exist to a high standard
- Lack of flexibility and/or low-quality provision on offer
- A strong desire and strategic vision to “do it ourselves” (employer providers)
- To do the right thing; to improve social and job mobility and career progression
As for the main reasons for exit? Here are our thoughts on why apprenticeship training providers exit the marketplace:
- Gone out of business (reached natural end or contract terminated by the ESFA)
- Cashflow issues (e.g. lower margins than expected) and increasing overheads
- Uncompetitive offer based on price, product, delivery and quality (i.e. no/low take up)
- Ever increasing burden of compliance, administration, management and monitoring
- Grew too quickly (with or without subcontractors) and lacked experience, knowledge and skills to manage accelerated growth.
Whatever the reasons, the Apprenticeship sector seems to be beset by problems and shrinking fast – at a time when good quality apprenticeship training provision is required more than ever before…
What do you think? What story does this picture tell you?
Feel free to let us know!
