The number of new apprentices in Wales, seen as vital to improving the Welsh economy, is at risk of a sharp loss of around 10,000 next year unless the Welsh Government plugs a huge funding hole caused by the loss of European financing.
The main bodies representing the apprenticeship sector in Wales, Colleges Wales and the National Training Federation of Wales (NfTW), set out their concerns about funding in a joint letter, seen by the Western Mail, sent to their respective members and employees of. Welsh Government. It warns that the Welsh Government’s flagship apprenticeship program could be cut by around a quarter (24.5%) next year.
As well as seeing a significant reduction in training starts, they also stated that this would lead to job losses across the sector and the collapse of several training companies. The sector is a collaboration between employers, universities and contract training companies. who participate in Welsh Government funding.
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While the Welsh Government has not yet finalized funding for its department for the 2024/25 financial year, which starts next April, and a draft budget will be published next month, it said it has faced a significant challenge through a UK block grant. the government concludes in real terms, taking inflation into account. Negotiations continue between the apprenticeship sector and the Welsh Government.
However, concerns were raised about the gap after it emerged that officials had shared a slide with industry representatives that did not highlight the loss of around £42m of European funding by 2024/25. Industry data believes the projected reduction of 3.56% was due to the loss of support from the European Social Fund (ESF). A drop of 3.56% was considered a problem, but after a year it is manageable.
In the current financial year, the Welsh Government’s overall apprenticeship programme, which reports to Economy Secretary Vaughan Gething, is worth around £156 million. Provider funding covers August to July of the academic year. Given that the Welsh Government’s financial year runs from April to March, this means that the current funding pool will be part-funded (three months) by an indicative commitment from the Cardiff Bay Authority’s 2024-25 budget.
If the EU’s previous contribution is not matched, the Welsh Government’s budget for apprenticeships will fall to around £118 million next year. This will have a disproportionate impact on new apprentices, as universities, employers and training companies will be forced to continue supporting apprentices already in the system.
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The letter, signed by College Wales chief executive David Hagendyk and NTfW strategic director Lisa Mitton, warned: “The impact of these proposed cuts will result in around 10,000 fewer people starting the government’s flagship apprenticeship program in Wales in 2024/25. The reductions will disproportionately affect young people (aged between 16 and 24), representatives of lower socio-economic groups and women.
“The analysis also suggests that this will likely mean a significant reduction in the number of black, Asian and minority students enrolled. Key priority sectors will be hardest hit, including critical recruitment in the health and social care sector. Other sectors that are negatively affected are construction and engineering, which are important for future growth.”
The letter said that the 24.5% cut, if implemented, would also cause significant losses in the sector, forcing some suppliers to close.
He added: “Early modeling suggests that almost 200 jobs will be lost in the registered vocational training workforce, and it is estimated that at least eight vocational and specialist training subcontractors will cease to operate, causing further job losses.”
The Welsh Government’s emergency budget in October indicated a saving of £17.5 million in the apprenticeship plan for 2023-24 due to a lack of demand in the previous year.
However, the letter says: this is simply not the case. Indeed, demand for new apprenticeships has not diminished, with the Welsh Government releasing figures showing an increase in the number of apprenticeships in the first half of 2022/23 compared to the same period last year.
“The reasons for underutilization in 2022/2023 were the effects of the pandemic, business decisions due to Brexit and inflationary pressures and the effects of changes to qualifications systems. In short, there is no shortage of demand for training from employers. “Indeed, we expect a significant increase in employer demand in 2023/24 which, if we can support it, will reflect well on the outlook for the Welsh economy.”
A Welsh Government spokesperson said: “The budget situation for 2024-25 remains challenging and we will work with the Learning Network to maximize results within the available budget. “We intend to publish full details of our spending plans when the Welsh Government publishes its draft budget in December.”
Ian Price, director of CBI Wales, said: “Developing people’s skills is a priority for businesses in Wales. Although the Welsh Government faces difficult financial times, it needs to introduce a fully funded upskilling programme.
to ensure Wales keeps up with the needs of the current economy. Wales risks losing its valuable talent to other countries without significant investment in universities and private education institutions. With two new free ports, investment zones and plans to decarbonise Tata’s Port Talbot steelworks, we need a highly skilled workforce so that Wales can reap the rewards of the growth we deliver.”
FSB Wales Chairman Ben Cottam said: “Our recently published small business and skills report shows the vital importance of meeting the skills needs of SMEs to bridge gaps and develop specialisms for business growth.
“A well-developed and highly skilled workforce must be a central part of any plan to develop our economy. “It is therefore imperative that there are sufficient resources available that not only meet these needs, but also support the ambitions of companies, as well as the aspirations and capabilities of their employees.”
“We have long warned of the problems caused by the fragmentation and confusion of economic development capabilities and efforts following the end of EU funding. It is important that, regardless of the source of funding, it is available to suppliers to meet the needs of the businesses they partner with and to provide programs that meet business needs, such as apprenticeships.
“Free ports, potential investment zones or even the growth potential of the local health sector depend on the availability of apprenticeships and the appropriate qualifications of workers. “We need clarity on exactly what will be available to meet this need.”
The UK Treasury received around £122 million in 2021-22 from Welsh employers through the UK-wide Apprenticeship Levy. However, it is estimated that only a third of apprentices come from tax-paying employers in Wales. This highlights the disparity between what they pay and what they receive in support from the Welsh Government, which as a result receives an equivalent fee formula.
Source: Wales Online
John Cameron is a journalist at The Nation View specializing in world news and current events, particularly in international politics and diplomacy. With expertise in international relations, he covers a range of topics including conflicts, politics and economic trends.
