Welsh Government cuts to apprenticeships could cost Welsh economy £400m, says Colleges Wales

Welsh Government cuts to apprenticeships could cost the Welsh economy £400 million, according to the CEO of Colleges Wales.

Colleges and training providers across Wales are facing a cut of around 24% to their 2024-25 apprenticeship budgets, compared with the current academic year. 

Speaking to ITV Wales’ Sharp End programme, David Hagendyk said: “Our modelling suggests that we are looking at 10,000 fewer people being able to start apprenticeships in September this year.

“That’s a huge impact. It’s about half the programme overall and obviously the impact is on the wider economy as well.

"We think about £90 million will be lost to the Welsh economy in the short term and over the long term probably £400 million lost to the Welsh economy as a result of these cuts this year.”

The Welsh Government has spent years encouraging people to embark on apprenticeships and had set a target of 125,000 new starters in apprenticeships by the end of the current Senedd term.

However that target has already been revised down and the draft Welsh Government budget has now slashed funding for apprenticeships.

Mr Hagendyk said he understands the financial constraints facing the government at this time but he called on politicians to reconsider the cuts.

He said: “It’s driven by real cost pressures. It’s driven by the loss of European social funding that was there in previous years.

“But we think it’s short-sighted and it needs to be reversed in some way.”

On Monday the Senedd’s Economy, Trade and Rural Affairs Committee released a report on the draft budget which raised concerns about the economic impact of cuts to apprenticeships.

Last month 65 Welsh companies in a variety of sectors co-signed an open letter emphasising the value of apprenticeships and detailing the negative impact cuts would have on their industries.

A Welsh Government spokesperson said: “Despite declining budgets, we are investing £138m next year in quality apprenticeships to help provide young people in Wales with successful futures.

“We remain committed to degree apprenticeships, maintaining funding for 2024-25 and supporting more people into higher wage occupations that support our economic and social priorities. This includes expanding into new sectors with a new rail engineering programme starting in January and construction programmes ready to start this September.

“The apprenticeship scheme is not the only route for skills-based education and training available to help businesses and trades fill vacancies. We continue to invest in programmes such as part-time further education courses, and our Personal Learning Accounts programme and National Vocational Qualifications.”

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