Skills minister Anne Milton has said she does not want to constrain the apprenticeship system by trying to shape the provision offered. 

Ms Milton was speaking to Tes in the week that marks the second anniversary of the introduction of the apprenticeship levy. 

The introduction of the levy on large businesses led to a significant drop in the number of people starting an apprenticeship, and although these have started to recover in recent months, they remain significantly below the levels of pre-levy years. 

But speaking in front of the Public Accounts Committee last week, Department for Education permanent secretary Jonathan Slater said that, on the basis of current trends, there could instead be a “significant overspend” in levy funds 2020-21 - something that had to be a consideration in the upcoming Spending Review. 

Read more: Apprenticeship funding may require ‘choices to be made’

Background: DfE unlikely to meet apprenticeship target, says NAO

More news: Halfon and Milton clash over further education funding

Second anniversary

Mr Slater said that, while there was sufficient funding for all kinds of apprenticeships, there were no concerns over companies using their levy funding to train managers. 

However, “there shortly isn’t going to be enough to go round for everything, and something has got to give”. He said: “One of the choices for government as resources get constrained would be to prioritise some apprenticeships over others.”

Ms Milton today told Tes that said there were three options for addressing budgetary pressures: “Put the levy up, put more government money in, or constrain the system.”

“Because of what I have seen, it would be a shame to constrain the system,” she added. “Some parts don’t sit quite right with me - someone on £70,000 doing an MBA [apprenticeship] doesn’t sit quite right - but that is a small number and that is not where the number is going. 

“At this point, it would be quite a shame to constrain the system because it is going quite well. But I have no fixed ideas. We have a Spending Review coming up so those three choices are what is out there, and I don’t want to constrain the system.”

‘Steady state’

She said the apprenticeship system was demand-led, and she expected that by September of this year, starts would have reached the level that would indicate the “steady state” level of apprenticeship starts. 

“We will be putting non-levy payers into the system, and it is hard to to predict how they will react, how much levy transfer we will see and how much of that will go to non-levy.”

A report by the National Audit Office last month found the rate of apprenticeship starts would have to double for the government to meet its target of 3 million apprenticeship starts by 2020. It also said the government has some way to go resources are being used to best effect, according to the National Audit Office (NAO).

‘Shift in employer behaviour’

Ms Milton said: “In the first year, some businesses were a bit grumpy, they didn’t want to pay the levy, and it has taken a bit of time for some employers to realise that the levy is here to stay and what they need. Some were ready to go this time two years ago.

“In the second year, we have seen a big shift in employer behaviour with them embedding apprenticeships into their employment pipeline. 

“If I look ahead, what I want to achieve is to make sure we have that progression in place in lots of sectors,” said the minister. She explained great strides had been taken by the NHS in establishing its apprenticeship system, and she had seen great work done by the construction industry, but wanted to see “better progression in a broad range of sectors.”

Ms Milton said there had also been a significant increase in the quality of apprenticeship provision, with many providers now good or outstanding - but “until that number is closer to 90 per cent, I won’t be satisfied”. 

Despite there having been a drop in the number of apprenticeship starts at level 2, she said this still made up the majority of starts in the system and was not down to the DfE focussing resources on higher-level apprenticeships: “There is no focus from the department on any one level.”