Construction apprenticeship starts showing signs of bounce back after years of decline

Apprenticeship starts in the construction sector show tentative signs of a bounce-back, with figures for the first two quarters of the 2021/22 academic year higher than the two years prior.

The number of people starting apprenticeships in construction, planning and the built environment annually declined every year between 2017/18 and 2020/21.

But Department for Education (DfE) figures show 20,500 people started apprenticeships between August 2021 and January this year – compared with 16,100 over the same period in 2019/20, and 13,100 in 2020/21.

If the trend continues into the full annual statistics, it will be the first time the number has increased since the government’s Apprenticeship Levy.

Mace chief executive Mark Reynolds, who serves as the Construction Leadership Council’s skills lead, said the figures reflected the work the group had done with the DfE and Construction Industry Training Board to address apprenticeship starts.

“Construction organisations and industry bodies have been working collaboratively to increase apprenticeship starts,” he said.

“From initiating [the] Talentview [recruitment portal] as a one-stop-shop for employers, to over £2.3m in levy transfer pledges from construction employers, we have been driving efforts to boost the number of apprenticeships in our sector.”

Suzannah Nichol, Build UK chief executive, said the pandemic had impacted the number of apprenticeship starts in previous years.

She added the group was “intent on improving the journey from education to employment”, adding that just 25% of students in construction-related training go onto careers in the industry.

Whether the apparent growth in starts means a return to pre-pandemic levels or a more substantial break with the trend of decline seen before the pandemic remains unclear.

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Many employers have claimed the Apprenticeship Levy, introduced in 2017, has made it more difficult to take on apprentices.

Employers with a payroll bill over £3m must pay 0.5% of that bill into a digital account, which, after a 10% top up by the government, can be spent by the employer on apprenticeship training and assessment.

However, some employers have claimed the system is too inflexible – funds cannot be put toward an apprentice’s wages or other associated costs, and instead go towards training which tends to be provided by colleges. Larger companies also say they can only transfer 25% of their total fund to other employers in their supply chain.

Market research by the Open University in 2019 found that, across the economy, £3bn in levy funding went unused.

In March’s spring statement, chancellor Rishi Sunak announced a review of the levy would be part of the Treasury’s new tax plan, to be finalised in the autumn.

“We will consider whether the current tax system including the operation of the apprenticeship levy is doing enough to incentivise businesses to invest in the right kinds of training,” he told the House of Commons.

But the Treasury subsequently denied that the system was under formal review, with officials in the Department for Education (DfE) reportedly pushing back against the proposal.

Lee Bryer, industry insight manager at the CITB, said that following the spring statement, the industry body would continue to work with the government so “construction employers get the skilled workforce they need”.

“Critical to increasing apprenticeship starts will be building on recent reforms of the Apprenticeship Levy Pledge Service to ensure unspent levy funds from larger companies can be accessed by small employers to provide more apprenticeship,” he added.

A DfE spokesperson said growing apprenticeship starts “remains a key priority” and said they would “continue to work with employers to boost the number of apprenticeships available”, including by increasing apprenticeship funding by £2.7bn by 2024-25.