The number of people in the UK choosing to do ICT apprenticeships has dropped over the past year despite the government’s apprenticeship levy.
The number of people who started apprenticeships in 2016/17 dropped in comparison to the year before, according to research.
Data from the Education and Skills Funding Agency suggested the number of people starting ICT apprenticeships in 2016/17 dropped by 6.3% in comparison to 2015/16 – a drop to 15,010 in 2016/17 from 16,020 the year before.
Derek Kelly, CEO of SJD Accountancy, a firm that provides services to a large number of IT contractors, said the number of people taking ICT apprenticeships appeared to have been recovering from a dip in the academic year 2013/14, but has since taken another nosedive despite the need for skilled workers.
“The impact of the new apprenticeship levy and obligations on smaller employers to meet some of the training costs has clearly discouraged the use of apprentices. The question is whether the initial drop-off in the number of ICT apprentices will bounce back or whether we will see further falls as employers invest in upskilling existing staff instead,” he said.
The government’s new apprenticeship rules came into effect at the beginning of April 2017, requiring firms with a payroll worth more than £3m to contribute to the apprenticeship levy – this has led many IT professionals to raise concerns over how best to use this levy to develop the technology skills the UK needs.
But despite government efforts to promote alternatives to university, such as apprenticeships, the Education and Skills Funding Agency data shows the number of people starting ICT apprenticeships hasn’t recovered since its peak in 2011/12 when 18,520 started an ICT apprenticeship.
Many believe this is partly due to uncertainty in the skills market caused by the UK’s Brexit vote, which has caused almost three-quarters of tech workers in the UK to consider moving elsewhere once the UK leaves the European Union (EU).
This has made it more important for the UK to focus on developing home-grown tech talent, but many claim there is still a “mismatch” between what firms want from potential employees and the skills young people have when they leave education.
According to SJD Accountancy’s analysis of Education and Skills Funding Agency data, less than two-thirds of apprentices typically finish their courses with a qualification, and the number of people who completed an apprenticeship also dropped slightly in 2016/17 in comparison to the previous year.
“The UK has suffered from a chronic underproduction of tech skills, which has made it increasingly reliant on foreign talent to plug skills gaps. With the UK leaving the EU, that model is under threat, which makes indigenous skills and training more important than ever for the growth of the UK tech sector,” said Kelly.
In many cases, firms are turning to contractors when they are unable to find new recruits with the skills needed to fill roles. SJD Accountancy’s data found 8.7% of firms had hired IT contractors over the past six months, an increase from the 3.4% of firms hiring IT contractors in the months immediately following the UK’s decision to leave the European Union.
Though the UK government has aimed to provide a more robust tech talent pipeline through the introduction of the new computing curriculum, Kelly believes “increasing the talent pipeline will be vital” to meeting the predicted demand for technology skills over the next five years.
Barriers to apprenticeships
However, apprenticeships are still regarded by parents and teachers, as well as some industry professionals, as not being as valid of a route into a career when compared against a university degree.
Education and Skills Funding Agency data suggests that the number of people under the age of 19 – the age in England where people are considering what route to take following their A-Levels – who have chosen to pursue an ICT apprenticeship dropped significantly in the 2016/17 academic year.
In 2015/16, 6,660 people under the age of 19 started an ICT degree, which dropped to 5,290 the following year. This is still significantly lower than in 2011/12, where the number of people in this age range who started an ICT apprenticeship reached 7,930.
John Pritchard, head of apprenticeships at BCS – The Chartered Institute for IT, said: “We need to reverse the downward trend, and encourage all players – government, employers large and small, teachers, careers advisors, parents and, of course, young people themselves – of the huge value that an apprenticeship can bring in kick-starting their careers.”
There is also a lack of advice for young people hoping to take an alternative route to university, and many who have started apprenticeships have said they had to use search engines to find different routes into the workplace.
The Apprenticeship Levy introduced by the UK government in 2017 was developed as part of the government’s strategy to create three million apprenticeships by 2020, but many in the IT industry are concerned firms will not use the Levy to grow the skills needed to address the skills gaps that exist now and will exist in the future.
“There is a clear message in the digital space that we now have a progression route from entry to masters level, which will enable career paths with true technical competence and professional recognition,” said Pritchard.
To better understand the demand for technology and digital roles in the UK, the government recently launched a survey to find out more about the current and future digital skills needs across all industries with the hope of better addressing these needs in the future.
This will help the government to form more relevant policies to help close skills gaps in the future, as well as contribute to some of the strategies the government already has in place.