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High apprenticeship withdrawal rates cause training providers to lose out on over £1.8bn of funding

New data from the Department for Education (DfE), gathered by apprenticeship software company Rubitek via a freedom of information request, has revealed that training providers have lost out on over £1.8bn in potential earnings over the past four academic years due to apprentices withdrawing from their training programs.*

When aggregated across the number of government-accredited training providers the average lost, purely because of withdrawal, is £366,470 in earnings per provider in the 2021/22 academic year.***


The figures arrive in a period of low apprenticeship achievement rates, declining from 65% in 2018/19, to 58% in 2019/20 and 2020/21.**


Provided alongside the data, the Department of Education sought to highlight the following in regard to the data: “The data only covers withdrawals; nothing else has been considered that may result in a loss of earnings. The increase in value year-on-year is explained in part by COVID-19 and the increase in the costs of standards compared to frameworks and other legacy funding models. Withdrawals are reported at the planned end date and not the actual withdrawal date, whereas the data below provides the earnings to the planned end date.”


Figure 1 – Overall earnings not paid due to withdrawal

Academic Year

Earnings not paid due to withdrawal

2018/19

​£388,637,630

2019/20

£463,254,079

2020/21

​£479,847,515

2021/22

​£544,573,995

Total

​£1,876,313,217

Figure 9 - Achievement Rate for 'Apprenticeship Achievement Rates Headlines' for Advanced Level, Higher and Intermediate Level in England between 2018/19 and 2020/21

2018/19

2019/20

2020/21

Total

65.10%

57.50%

57.70%

Intermediate Level

64.20%

58.70%

58.00%

Advanced Level

67.00%

57.80%

58.40%

Higher Level

60.20%

52.10%

55.30%

Kerry Linley, founder and CEO at Rubitek, said:

“When apprenticeship funding is lost it has a negative impact on the quality of the apprenticeships available and the ability of employers to train their staff effectively.
Training providers rely on the funding they receive from employers' digital accounts to deliver high-quality apprenticeship training, pay their staff and cover their overheads. If they do not receive the funding they are entitled to, they may struggle to deliver the training effectively, leading to a poorer experience for the apprentices and potentially lower completion rates.
Employers may also be unable to access the training they need to upskill their staff, which could have a negative impact on their productivity and competitiveness in the long run.”

Release of the new figures follow an announcement that ‘Returnerships’, a new apprenticeship scheme for reskilling over 50s, was unveiled by Chancellor Jeremy Hunt in the Spring Budget. Despite calls for a review of the apprenticeship levy, as well as an administrative overhaul of the system that reduces the burden on employers and training providers alike, there was no announcement of further revisions to the system.


This was despite added pressure on skills and apprenticeships minister Robert Halfon to crack down on failures in the current system, such as misuse of apprenticeship levy funds by top executives to subsidise £100m in “ineligible MBA courses”.****


Currently, the UK's apprenticeship levy system requires businesses with an annual payroll of over £3 million to pay 0.5% of their wage bill into a digital account to fund training and assessment of apprentices. Employers can select a training provider to deliver the training and pay them directly from their digital account.


The amount paid to a training provider from the levy pot will depend on the cost of the training, which is set by the government and varies depending on the level and type of apprenticeship. Training providers are paid 80% of their total funding in monthly instalments as the apprenticeship progresses, with the remaining 20% paid when the outcome following completion (achievement / non-achievement) is recorded


Kevin JohnsPutra, CEO at London Examinations Board, said:

“Not receiving apprenticeship levy money due to apprentice withdrawal adds a lot of pressure for all apprenticeship providers across the country. We put a lot of time and effort into designing and delivering high-quality apprenticeship programmes that are engaging and rewarding. We also work hard to identify and ensure there is support in place for apprentices who are struggling or showing signs of disengagement to minimise the likelihood of early withdrawal.
When an apprentice withdraws not only does a provider lose the funding they have planned for, but they also have to bear the costs associated with enrolment, assessment of suitability and the investment in training delivery already made, not to mention recruiting for a replacement. This puts a strain on resources and makes it harder for providers to deliver the best possible training to the remaining apprentices.”

Kerry Linley, founder and CEO at Rubitek, added:

“Whilst the government champions its new ‘Returnerships’ scheme, it distracts from a continuous failure to address systemic problems, that go beyond the effects of COVID-19. The Department of Education’s systems are comically outdated and put an overwhelming administrative burden on training providers, forcing them to prioritise resources on complying with an outdated legacy system. This takes focus away from delivery of an enriching and mutually beneficial apprenticeship programme that works in the best interests of employers and their apprentices.”

Citations

* Earnings not paid due to withdrawal taken from Freedom of Information request submitted to the Department of Education on behalf of Rubitek – See breakdown in Figures 1-5 below.


** Figure on drop-outs taken from Apprenticeships and traineeships publication, Apprenticeships Achievement Rates Headlines section – See Figure 9 below.


*** Value calculated via a division of Figure 1’s 2021/22 academic year total, divided by Figure 6’s summation of providers that made a successful Individualised Learning Record (ILR) return in 2021/22 (£544,573,995/1,486 = £366,470).


**** Robert Halfon’s comments on misuse of apprenticeship levy funds follows an investigation by The Independent, more information can be found here: https://www.independent.co.uk/news/uk/home-news/government-clampdown-mba-apprenticeship-levy-b2299919.html


About the research


The following figures were provided by the Department of Education following a Freedom of Information submitted to the Department of Education on behalf of Rubitek, requesting the following information:


1. How much funding have training providers not received as a direct result of non-completion (ie learner status being ‘Withdrawn’), by month across the past four academic years (2018/19 to 2021/22)?


The Department of Education asks for the following points to be considered regarding the information provided:

  • The potential earnings are derived based on the payment calculator used, i.e., 20% held for completion and the remainder 80% split over the number of planned months, highlighting the 20% completion that is held until completion.

  • The data only covers withdrawals; nothing else has been considered that may result in a loss of earnings.

  • The data covers standards, frameworks, and legacy models FM35 and 81-Pilot.

  • The increase in value year-on-year is explained in part by COVID-19 and the increase in the costs of standards compared to frameworks and other legacy funding models.

Figure 1 – Overall earnings not paid due to withdrawal

Academic Year

Earnings not paid due to withdrawal

2018/19

​£388,637,630

2019/20

£463,254,079

2020/21

​£479,847,515

2021/22

​£544,573,995

Total

​£1,876,313,217

Figure 2 - Earnings not paid due to withdrawal (2018/19)

2018/19

Earnings not paid due to withdrawal

August (1)

£28,792,555

September (2)

£35,766,909

October (3)

£35,082,604

November (4)

£31,164,533

December (5)

£30,090,631

January (6)

£30,218,846

February (7)

£30,829,517

March (8)

​£33,602,768

April (9)

£32,543,690

May (10)

£31,839,220

June (11)

£31,578,148

July (12)

​£37,128,208

Total

£388,637,630

Figure 3 - Earnings not paid due to withdrawal (2019/20)

2019/20

Earnings not paid due to withdrawal

August (1)

£36,781,326

September (2)

£44,611,857

October (3)

£39,938,363

November (4)

£37,105,248

December (5)

£35,719,777

January (6)

£36,994,917

February (7)

£36,848,918

March (8)

£39,749,239

April (9)

£38,835,841

May (10)

£37,569,427

June (11)

£36,915,165

July (12)

£42,184,002

Total

£463,254,079

Figure 4 - Earnings not paid due to withdrawal (2020/21)

2020/21

Earnings not paid due to withdrawal

August (1)

£41,463,426

September (2)

£52,064,472

October (3)

£44,026,808

November (4)

£39,844,635

December (5)

£38,820,544

January (6)

£39,347,260

February (7)

£36,749,432

March (8)

£40,299,631

April (9)

£36,024,474

May (10)

£34,659,209

June (11)

£35,437,510

July (12)

£41,110,114

Total

£479,847,515

Figure 5 - Earnings not paid due to withdrawal (2021/22)

2021/22

Earnings not paid due to withdrawal

August (1)

£42,080,805

September (2)

£55,270,950

October (3)

£44,669,640

November (4)

£43,626,132

December (5)

£42,849,992

January (6)

£43,947,182

February (7)

£42,605,193

March (8)

£47,247,914

April (9)

£44,177,114

May (10)

£43,851,751

June (11)

£46,470,372

July (12)

£47,776,948

Total

£544,573,995

2. The total number of Training Providers that successfully submitted an Individualised Learning Record (ILR) upload by month, across the past four academic years (2018/19 to 2021/22).


The following is a summation of the number of unique UKPRN for each provider that made at least 1 ILR return during the respective academic year. For a copy of the spreadsheet containing the entire dataset please contact support@rubitek.co.uk.


The Department of Education asks for the following points to be considered regarding the information provided:

  • The spreadsheet contains five tabs, one for each academic year, and one containing pivot tables of provider submissions by period for 2018-19 to 2021-22.

  • For each year, we have listed the UKPRN for each provider that made at least 1 ILR return during the year and a 1 or 0 flag for each period. We have also provided a list of those UKPRNs whose latest submission generated apprenticeship actuals. There is a column called Apps in each spreadsheet; 1 means they generated funding for apps.

  • The pivot table has a table per year that shows how many providers made a submission in each period. We have filtered them where the Apps column is set to 1 so the numbers are currently those providers who generated apprenticeship funding.

Figure 6 - Number of Providers making an ILR Return by Period:

  • 2021 - 2022 Academic Year, count of UKPRN – 1,486

  • 2020 - 2021 Academic Year, count of UKPRN – 1,558

  • 2019 - 2020 Academic Year, count of UKPRN – 1,502

  • 2018 - 2019 Academic Year, count of UKPRN – 1,461

Figure 7-8 taken from Apprenticeships and traineeships publication on government website, for time period 2015/16 to 2021/22 – full overview available at the following link: https://explore-education-statistics.service.gov.uk/find-statistics/apprenticeships-and-traineeships


Figure 7 – Apprenticeships starts by level - Total (England)


2015/16

2016/17

2017/18

2018/19

2019/20

2020/21

2021/22

Total

509,360

​494,880

375,760

​393,380

322,530

​321,440

349,190

Advanced

190,870

​197,660

166,220

​174,730

140,840

​138,490

151,310

Higher

27,160

36,570

48,150

75,060

82,460

98,810

106,360

Intermediate

291,330

260,650

161,390

143,590

99,220

84,150

91,520

Figure 8 – Apprenticeships starts supported by Apprenticeship Service Account (ASA) levy funds - Total (England)

2016/17

2017/18

2018/19

2019/20

2020/21

2021/22

Total

21,120

186,040

223,910

209,280

205,330

225,590

Advanced

7,760

81,820

96,540

85,710

80,710

90,290

Higher

1,980

32,790

56,830

67,610

81,400

86,610

Intermediate

11,390

71,430

70,540

55,950

43,230

48,690

Figure 9 taken from Apprenticeships and traineeships publication, Apprenticeships Achievement Rates Headlines section – full overview available at the following link: https://explore-education-statistics.service.gov.uk/find-statistics/apprenticeships-and-traineeships


Figure 9 - Achievement Rate for 'Apprenticeship Achievement Rates Headlines' for Advanced Level, Higher and Intermediate Level in England between 2018/19 and 2020/21

2018/19

2019/20

2020/21

Total

65.10%

57.50%

57.70%

Intermediate Level

64.20%

58.70%

58.00%

Advanced Level

67.00%

57.80%

58.40%

Higher Level

60.20%

52.10%

55.30%


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