The number of apprenticeship starts in Wales is forecast to fall by nearly 6,000 in the 2024/25 academic year following a significant cut in Welsh Government funding, shows independent research.
Representative bodies for colleges and training companies, ColegauCymru and the National Training Federation for Wales (NTfW) - which work with employers to deliver apprentices under the Welsh Government apprenticeship programme - commissioned the Centre for Economics and Business Research (Cebr), to assess the impact of a 14% funding cut.
The Welsh Government said this was as a result of the loss of European Union funding. Cebr said that for the first quarter of the current academic year - August to October - there were 2,149 fewer apprenticeship starts in Wales than in the previous year. The actual number of starts (just under 6,000) was down 26.3%.
The report, based on the reduced funding settlement from the Welsh Government, shows that for the full academic year training providers were able to predict a 5,750 decline in new apprenticeships - the vast majority of which would have been taken up by young people seeking to embark on an industry specific career.
Funding for apprenticeships in the Welsh Government’s current financial year to the end of March, 2025, is £143.9m. However, for apprenticeship contract allocations - from August this year to the end of July, 2025 - it is £134.5m. What makes assessment a little more complicated is that apprenticeship providers have a two-year contract, spanning two Welsh Government financial years. At one stage, before a supplementary budget boost, the Welsh Government’s apprenticeship funding this year was facing a 24% cut.
The Cardiff Bay administration said that since 2020-21 annual funding for apprenticeships in Wales has increased from £128m to over £143m this year, despite EU funding coming to an end in 2024-25.
The Cebr report said the impact of fewer apprentices will have a £50.3m “short run” impact on the economy, which if not addressed could see an estimated long-term loss ranging from a conservative £158.7m to £215.7m. The report estimates that so far the reduction has resulted in the loss of 87 full-time equivalent jobs amongst training providers and their subcontractors, incurring a total salary loss of £2.42m.
It also highlights that the health and social care and construction sectors are being impacted significantly, with the overall reduction in apprenticeship numbers being felt most acutely amongst people in deprived communities.
ColegauCymru chief executive, David Hagendyk, said: “The data is deeply concerning and underlines the devastating impact of apprenticeship funding cuts on Wales’ economy and our most vulnerable communities. A strong apprenticeships programme is critical for Wales’ economic recovery, equipping individuals and businesses with the skills they need for success. Apprenticeships are fundamental to building a stronger, greener and fairer Wales."
NTfW strategic director, Lisa Mytton, added: “The findings are a stark warning. Without urgent action, we risk long-term damage to Wales’ workforce and economy. Apprenticeships must remain a priority in government funding to secure our future.”
"ColegauCymru and the NTfW have previously called on Welsh Government to restore the apprenticeships budget to levels seen prior to the loss of European structural funds. The findings of the research endorse this call so as to mitigate any further impact to the apprenticeships programme in Wales beyond this year.
“The Welsh Government must restore funding for the apprenticeship programme. It is critical to give our public services the staff and the skills they need to improve outcomes and to give businesses the skills they need to grow the economy."
They will looking to the Welsh Government’s draft budget for 2025-26 next month from Finance Secretary Mark Drakeford, for an improved funding settlement for apprentices. However, while the recent budget from Chancellor Rachel Reeves will see the Cardiff Bay administration receiving an additional £1.7bn (of which £200m is for capital) in Barnett Formula consequentials in its next financial year, the lion’s share will be taken up by health and education. There will be many other competing departmental increased spending line bids for the remaining balance.
A Welsh Government spokesperson said:“We are investing £143m in 2024-25 in quality apprenticeships to help provide young people in Wales with successful futures. We will consider our spending decisions for 2025-26 as we develop our Draft Budget in the weeks ahead.”
The Welsh Government said the Cebr report doesn’t recognise a significant increase in the take-up of degree apprenticeships in Wales – from 145 new starts in 2018-19 to over 300 starts in 2022-23.
Latest figures show there were 46,610 individual learners following an apprenticeship programme in Wales during the 2022-23 academic year. Figures for 2023-24 will not be published until February.
