It is almost seven years since the introduction of the apprenticeship reforms in Spring 2017. Since then, apprenticeship provision has changed dramatically for both apprentices and apprentice employers. The publication of the latest apprenticeship data enables an analysis of a further complete 12 months of the apprenticeship programme, the lasting effects of the 2017 apprenticeship reforms (of which the levy has been the most impactful) as well as the more recent pandemic.

Recovery of apprenticeship starts after Covid-19 but figures still below the pre apprenticeship reform

In the last whole year before the 2017 reforms (August 2015-July 2016) there were 509,360 apprenticeship starts. By the time of the last whole year prior to the pandemic, the total number of starts (August 2018-July 2019) had fallen by almost a quarter. The pandemic reduced apprenticeship starts by a further fifth, and then recovered. The latest whole-year data (August 2022-July 2023) shows that starts have recovered from their Covid-19 low but are still one-third below their pre-reform total.

The Covid-19 pandemic reduced apprenticeship starts across all age groups, but young people hit hardest

The impact of the apprenticeship Levy was similar across all age groups. There was a fall in the number of starts of around one quarter for those aged under 19and the 19-24 age group and a decrease of 20% for those aged 25+. The pandemic however had a much greater impact on young people. The number of starts for those aged under 19 fell by more than one-fifth (2018/19-2021/22), whilst starts for the older age groups fell by 8%. Comparing the number of starts in 2022/23 and 2015/16 shows that the number of starts for the under 19s fell by just over 40%, by over one-third for those aged 19-24 and by around one-quarter for those aged 25+.

Higher level apprenticeships have grown while Intermediate and Advanced apprenticeship starts have reduced

The levy and the pandemic have both contributed to a reduction in the number of Intermediate and Advanced apprenticeship starts. The number of Intermediate starts declined by half between 2015/16 and 2018/19. The pandemic reduced Intermediate starts by a further third. By 2022/23 the number of Intermediate starts had fallen by three-quarters. Advanced apprenticeships suffered a similar, though lesser, fate. The impact of the levy reduced Advanced starts by one-tenth, and the pandemic by 13%. By 2022/23, Advanced starts were three-quarters of their 2015/16 total.

Higher level apprenticeships, however, have grown significantly since 2015/16, albeit from a low base. By 2018/19 the number of Higher starts almost trebled. The pandemic slowed the growth of Higher apprenticeships, but their number still grew by more than 40%. There was almost a fourfold increase in Higher starts in the eight years since 2015/16. The growth in Higher apprenticeships occurred in every age group and transcended the impact of the levy and the pandemic. The reverse happened to Intermediate and Advanced apprenticeships.

Levy payers: the other winner from the apprenticeship reforms

The other winners from the apprenticeship reforms were levy payers. Since the introduction of the levy, levy payers (larger organisations) have increased their starts in almost all age and level categories, with the exception of Intermediate apprenticeships. They also maintained their starts throughout the pandemic. However, non-levy payers (smaller organisations), have seen reductions in all age and level categories, except for Higher apprenticeships.

Conclusion

The 2017 reforms have clearly benefitted levy payers and Higher apprenticeships. And the two are linked. Since 2017/18, levy payers have reduced the number of Intermediate starts and increased the number of Advanced and (significantly) Higher level apprenticeships across all age groups. Non-levy payers have also increased the number of Higher-level starts in every age group but reduced all others. The increase in Higher level apprenticeships reflects employer demand for higher-level skills. However, this has been at the expense of lower-level apprenticeships that offer many young people a prized pathway into employment.