The apprenticeship sector is facing a period of change. The transformation of the apprenticeship levy into a growth and skills levy by the new Labour government brings uncertainty and we will only gain clarity on the likely impacts of this change as the government’s new agency, Skills England, takes shape. In the meantime, the latest apprenticeship starts data reveal an interesting picture. There is cause for cautious optimism in relation to overall uptake of apprenticeships and exciting opportunities are available to those who target the right parts of the market.
Starts for the first three quarters of the year are marginally up on last year (278.6k vs. 277.2k), confirming that the decline between academic years 2021/22 (AY22) and 2022/23 (AY23) has not continued. If you take the view that the figure for AY22 was boosted by learners who had delayed starting their apprenticeships in AY21 due to the uncertainty of the pandemic, it is possible that the market has reached a steady state, with this year’s starts number very similar to the pre-pandemic AY20 figure of 278.9k.
Lifetime’s growth has consolidated its position as the largest provider in the market (12.9k starts), with over double the number of starts as the next largest provider. If you consider a ranking of providers by number of starts, the biggest movers from AY23 to AY24 are Multiverse (5th to 2nd; 28% growth), Corndel (9th to 5th; 29% growth), and Paragon (10th to 6th; 32% growth).
Two examples of smaller providers that have seen good growth over the past year are MBKB Training (+572 starts; 89% growth) and Woodspeen Training (+629 starts; 75% growth).
It is possible that the market is seeing the early stages of consolidation of starts amongst the largest providers. The proportion of starts delivered by the 10 largest providers is at its highest level in the past 6 years (19.3%), however the range across this time period has been small (16.3% – 19.3%).
The subject sector areas (SSA2) that have seen the greatest growth from AY23 to AY24 include Business Management (+3.2k starts; 10% growth), Health and Social Care (+1.7k starts; 5% growth), ICT Practitioners (+1.1k starts; 6% growth), Service Enterprises (+1.0k starts; 17% growth), and Manufacturing Technologies (+1.0k starts; 16% growth).
Early Years Educator (11.7k starts), Team Leader or Supervisor (10.6k starts), and Business Administrator (10.3k starts) remain the most popular standards.
Standards that have seen significant growth this year include Data Technician (+1,351 starts; 42% growth), Data Analyst (+1,052 starts; 25% growth), Senior Leader (+1,168 starts; 26% growth), and Children, Young People and Families Practitioner (+1,078 starts; 32% growth).
This year has seen an acceleration in the trend towards higher (including degree) apprenticeships (34.0% share growing to 36.1%) and away from intermediate standards (22.7% share declining to 20.9%). Whilst not shown on the above chart, this trend has been driven by growth in start numbers for every level from 4 to 7. There have been no announcements since the election but it’s possible that the new Labour government will look to reverse this trend.
With the shift towards higher level standards, one might perhaps expect a concomitant shift towards more older apprentices and there is some evidence for this, however the age profile of apprentices in AY24 looks very similar to that of AY23. There has been a slight increase to the proportion that are 25 or over (45.5% share growing to 46.5%), but not at the expense of the youngest age group. The share of starts amongst apprentices under 19 remained stable (24.8% share growing to 25.1%), whilst the share of those aged 19-24 declined (29.8% share declining to 28.4%).
A piece of good news for independent training providers and their investors is that the proportion of starts delivered by ITPs grew from AY23 to AY24 (62.5% share growing to 64.4%).
We will have to wait until later in the Autumn to see the final starts data for AY24, however, as a rough guide, over the period AY19-23, c. 17% of starts occurred in Q4.
Our FE and Skills practice is led by Arun Kanwar (Partner), Sam Lecacheur (Partner) and Rob Dancey (Manager), authors of this article.
If you would like to discuss the content of this article and our analysis further or learn more about our work, contact the authors directly or at [email protected].
Footnotes:
1. The figure for Q1 to Q3 starts in AY24 will likely increase slightly when the full year data is released. In the two previous years (AY22-23) the increase has averaged 0.7%. The size of this increase will vary between providers and from one standard to another.
2. The figures used for BPP Professional Education do not include starts for BPP University (1,277 starts in Q1 to Q3 of AY24) or BPP Actuarial Education (193 starts in Q1 to Q3 of AY24)
