Roundtable Context
Colleges, training providers and employers entered 2022 having weathered three acute shocks in rapid succession: the disruption of Brexit to the labour market, the closure of campuses through the pandemic, and a cost of living crisis straining both institutional budgets and apprentice wages. This report documents what those on the frontline told Peter Aldous MP and his team needed to change — and why.
It's investment in flesh and blood rather than investment in concrete and steel, which is probably most important.
— Peter Aldous MP, Chair of FE & Lifelong Learning APPG
Cost of Living Crisis
Rising energy bills and the absence of long-term funding settlements dominated the opening discussion. Principals described institutions teetering on the edge of viability — not through mismanagement, but through structural underfunding compounded by soaring utility costs and the abrupt withdrawal of European staffing pipelines.
Energy bills crisis
One principal reported their electricity bill rising from £400,000 to £1.2 million. A social enterprise had budgeted for a 50% rise in utility bills and described even that as 'looking optimistic'.
Funding cliff at 18
One college principal noted that funding for students drops by 17.5% once they reach 18 — directly hitting those whose GCSE exams were disrupted by the pandemic and who are now reaching adulthood.
Capital vs. teaching
Peter Aldous argued that new funding must prioritise people and teaching over capital projects: 'concrete and steel'. Providers need staff, not buildings.
I think what you'll see is a big drop in young people even wanting to engage in education. And that is a future crisis waiting to happen.
— A college principal, roundtable attendee
Apprenticeship Levy — Not Working as Intended
The apprenticeship levy — introduced in 2017 to reform apprenticeship funding — was a consistent thread through the discussion. Attendees described a system that had been captured by large employers training existing staff, leaving school and college leavers with fewer entry-level opportunities than before its introduction.
Levy used for existing staff
Multiple attendees noted that the levy is routinely used to upskill existing employees rather than bring in younger, new workers. This was described as contrary to the policy's intent.
Level 2 & 3 provision collapsing
Since the levy was introduced, the number of Level 2 and 3 apprenticeship starts has dropped by more than two-thirds since 2016/17 — a figure cited directly in the report.
Unspent levy sitting idle
A representative from a local employer group described larger firms reluctant to transfer their levy funding to smaller companies, leaving millions in public funding unused. Unspent funds are returned to the Treasury.
SME cap suppressing supply
Government rules restrict small-to-medium enterprises to employing a maximum of ten apprentices, constraining the supply of entry-level opportunities at the very moment demand is rising.
The apprenticeship levy system was not working as efficiently as it could and it was holding down Britain's productivity.
— Peter Aldous MP, summarising roundtable consensus
Employers, Young People & the Wage Problem
The third theme that emerged was the systemic failure to make training economically viable for young people — and the corresponding disengagement of employers who complain about skills gaps without contributing to solving them.
Apprentice wage uncompetitive
One college principal noted that local hospitality venues were offering £11/hr for waiting staff, while the apprenticeship minimum wage stood at £4.81/hr. Multiple attendees agreed: 'it's not worth coming off benefits for.'
Young people disengaging
A charity representative voiced frustration that young people were being shoehorned into training unsuited to their needs, with insufficient political interest in those furthest from the labour market — including those with special educational needs.
Employers' accountability gap
One principal recalled employers visiting to complain about wrong skills — yet when asked what work experience they offered, or what their own training programme looked like, 'many employers did not have an answer to those questions'.
The number of young people not in work or training is a future crisis.
— Roundtable attendee
Directly sourced figure
The number of apprentices at Level 2 and 3 has dropped by more than two-thirds since 2016/17 — cited by a roundtable attendee representing an apprenticeship agency. This is the single quantified figure in the source report.
Roundtable Participants
Norwich, 31 August 2022 — Grade Communications roundtable
Peter Aldous MP
Chair, FE & Lifelong Learning APPG, Waveney
Terry Baxter
Chief Executive, Inspire Suffolk
Anne Bailey
CEO & Co-Founder, Form the Future
Sally Butcher
Managing Director, Realise Futures
Gareth John
CEO, First Intuition
Natasha Waller
Skills Manager, New Anglia LEP
Sally Moore
Director, Training and Apprenticeships in Construction
Catherine Richards
Principal, East Norfolk Sixth Form College
Jerry White
Principal & CEO, City College Norwich
Colin Shaw
Principal of Sixth Form, West Suffolk College
Alex Birks
CEO, athe
Key Findings
Discussion conclusions from the roundtable
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The apprenticeship levy is being used to train existing staff, not bring in new younger workers — reducing Level 2 and 3 provision that school leavers depend on.
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Level 2 and 3 apprenticeship starts have dropped by more than two-thirds since 2016/17, with degree apprenticeship starts more than doubling in the same period.
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The apprenticeship minimum wage — at £4.81/hr at the time of the roundtable — was described as not enough to come off benefits, actively deterring younger, more capable candidates.
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Energy bills threaten institutional viability: one college reported its electricity costs rising from £400,000 to £1.2 million, with a social enterprise calling its 50% budget increase optimistic.
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Funding must prioritise people over capital — Peter Aldous called for investment in “flesh and blood rather than concrete and steel”.
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Employer accountability was challenged directly: principals noted that employers who complain about skills gaps often cannot explain what training or work experience their own organisations provide.
