Drop in apprenticeship figures to hit North West digital firms

The Government’s target of three million people starting apprenticeships by 2020, is looking unlikely after another huge fall in the uptake of apprenticeships was announced.

The latest figures from the Department for Education revealed a 34% drop, to 290,500, in the number of people taking up the training programme in the first nine months of 2017/18.

A new Apprenticeship Levy, which was introduced in April last year has been a contributing factor in the drop in numbers.

Mark Norse, managing director of NowSkills, a North West IT apprenticeship provider, believes issues in the understanding and application of the Apprenticeship Levy could be a contributing factor.

The Levy, which is a new way of funding apprenticeship training, requires companies with annual payrolls of £3m or more to contribute 0.5% of their payroll costs into a fund.

The fund, which is topped up by the Government, can then be used to pay for training from approved providers via a digital account system.

According to Mark Norse, this could be a huge blow for the region.

The North West is currently experiencing skills gaps across several key industries, and none more so than the digital sector, where increasing digital skills are seen as intrinsic to the development of the Northern Powerhouse, and Manchester Mayor Andy Burnham’s vision of a digital city.

Earlier this year, the Northern Digital Jobs Strategy Report (NDJBS) found that productivity in the region’s digital sector is growing four times faster than the wider economy, and there will be 712,750 digital tech job vacancies in the region in the next three years.

However, if the number of entrants into the market continues at existing rates, then finding people to fill these roles will prove difficult – 58% of digital companies in the region highlight that finding ‘talent’ is already one of their key business challenges.

According to the 2018 Manchester Digital Skills Audit, one in five businesses in the North West report turning down work because of skills shortages, and 18% have had to outsource work.

A solution to this, highlighted in the report, was the development of apprenticeships and pooling of the Apprenticeship Levy.

Today, Norse is calling on employers in the region not to be put off by the Apprenticeship Levy, which only two weeks ago was updated to help smaller business access funds to pay for apprenticeship training.

Instead, he suggests that they look to expert providers who can help them navigate the system.

He says: “The numbers released by the Department of Education are disappointing to see. Especially when we look at the skills, challenges and talent gaps that already exist in the North West, particularly in the digital sector which is crying out for talent that is work-ready.”

However only four in ten digital businesses in the region currently employ apprentices, and with numbers falling because of issues in the understanding and application of the Apprenticeship Levy, this can only be bad news for the North West – especially as the audit highlighted that 71% of those working in the digital sector in the region originate from the North West.

“Therefore, in order for the digital sector to maintain growth, developing young, local talent is vital.

“And with, one of the primary business challenges being highlighted being a lack of relevant industry experience among candidates – then more apprenticeships could be the answer.

Norse added: “Three quarters of those who took part in the Manchester Digital Skills audit believe that part of the digital skills issue is that there’s not enough industry intervention in education to equip young people for digital and tech careers. Well, now is the time for businesses in the North West to step up.

“Only two weeks ago, the Government announced further changes which will allow Levy-paying employers to transfer up to 10% of it to another employer. This is a positive step and opens up apprenticeships to even more employers and apprentices.

“We would urge businesses in the North West to make the most of this and start to speak to their bigger clients to see if there is an opportunity for them to pass this into the supply chain.

“Alternatively, for those employers unable to access a Levy transfer, there are still fully-funded and co-investment funding options available for all employers.”