There have been fewer people starting apprenticeships in London in recent years. This is partly because of changes in government policy, including the introduction of the Apprenticeship Levy in 2017 and wider reforms to improve the quality of training. More recently, the COVID-19 pandemic also caused a significant decrease in apprenticeship starts.

This blog reviews recent trends with a focus on three key areas: the level of apprenticeships started, the age of apprentices, and the size of employers. A more in-depth GLA Economics update can be found on the London Datastore here.

Total apprenticeship starts have fallen in London

The total number of apprenticeships started by learners living in London has fallen over the last decade. There was a sharp drop following the introduction of the Apprenticeship Levy, with starts in 2017/18 around 7,500 below their pre-levy average.[1] The COVID-19 pandemic also resulted in starts falling, from 40,800 in 2018/19 to 33,900 in 2019/20.[2] Although volumes started to recover in 2020/21 and 2021/22, they are yet to return to their pre-pandemic level.

Starts in London are more likely to be at higher level

Apprenticeships in London are now more likely to be at level 4 or above. The number of higher-level apprenticeships started by Londoners has increased significantly since 2016/17 (+242%), while the number of intermediate (level 2) apprenticeships has more than halved (-66%). This shift has been especially pronounced in London and may partly be a result of a focus on quality over quantity. However, there are concerns about who is affected by these changes.

Apprenticeship starts among younger Londoners are declining

Despite the potential benefits, fewer young Londoners have been starting apprenticeships.

The number of apprenticeships started by Londoners aged under 25 has declined by 22% since 2016/17, with the biggest decrease among those under 19 (-49%). In contrast, the number of apprenticeships started by learners aged 25 and over has only dropped by 8%. The profile of apprentices has changed markedly as a result: 55% of Londoners starting an apprenticeship in 2021/22 were aged 25 or over, while only 13% were aged under 19 (compared to 51% and 22% in 2016/17, respectively).

These trends are partly due to the impact of COVID-19 on younger apprentices, but research also suggests that young people have benefited less from the expansion of higher-level apprenticeships in recent years. This could be because employers who pay the Apprenticeship Levy are more likely to invest in skills training for their existing workers.

Wider barriers also appear to be discouraging young people from taking up apprenticeships. These include the low minimum apprenticeship wage, traineeships not leading to progression into apprenticeships, requirements from employers for English and maths qualifications, and lack of understanding of the value of apprenticeships among parents and young people.

Larger firms in London are more likely to participate in the apprenticeship system

In addition, larger firms in London are now more likely to offer apprenticeships. However, the number of apprenticeship starts at small and medium enterprises (SMEs) has decreased significantly since the introduction of the Apprenticeship Levy, despite an increase in 2020/21.

As well as changes to the funding system, other reforms introduced in recent years, like the requirement for at least 20% off-the-job training, may have make it harder for SMEs to hire apprentices. Smaller, non-levy paying businesses may also be less able to afford the costs associated with apprenticeships – a concern given current inflationary pressures.

Overall, both employees and employers can benefit from apprenticeships, which can also promote social mobility. So understanding the factors driving the recent decline in apprenticeship starts, especially among young Londoners, will be important as the capital emerges from the pandemic. In the context of significant worker shortages and growing demands for lifelong learning, supporting the take-up of apprenticeships – particularly among smaller employers – will also be important.

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[1] The pre-levy average here is the average number of starts between 2010/11 and 2016/17.

[2] Research conducted for the Department of Education (DfE) found that nearly half of apprentices in London had their apprenticeships paused or were placed on furlough (22% and 23% respectively).