Work-based training companies have responded positively to a Welsh Government decision to find additional funding for its flagship apprenticeship programme, but said the outlook still remains extremely challenging.
In its draft budget published in December the Welsh Government’s apprenticeship programme was facing a 24% cut at around £38m. Training companies and colleges, which work with employers to delivery apprenticeship, said this would have resulted in the number of new apprentices in 2024-25 being reduced by 10,000. The shortfall was caused mainly by the loss of EU funding which the Welsh Government said the UK Government had failed to plug.
In publishing a final budget settlement earlier this week Finance Minister Rebecca Evans provided an additional £5.25m for the apprenticeship programme. In total the Welsh Government was able to improve its total budget for its 2024/25 year, starting in April, by around £190m on the draft budget. This will also see an additional £40m for the NHS and a new £20m capital fund to support SMEs in the hard-pressed retail, leisure and hospitality sectors.
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The additional funding was the result of the Cardiff Bay administration receiving Barnett Formula consequentials from UK Government additional spending in departments which are devolved to Wales, as well as increasing its finance transactions capital facility with the Treasury by around £66m.
The original severe cut to apprenticeship funding in the draft budget was heavily criticised by the umbrella body for work-based training companies, the National Training Federation for Wales (NTFW) and the body representing colleges, CollegesWales, warning it would stifle the growth prospects of firms.
In welcoming the improved settlement on the draft budget, strategic director of the NTFW, Lisa Mytton, said:“This rethink recognises the importance of apprenticeships in providing individuals with valuable training opportunities to gain hands-on experience and develop specialised skills that are needed by employers across Wales.
“We have maintained from the outset that apprenticeships are a vital component of building a skilled workforce and closing the skills gap in our country.
“The NTFW is delighted that the huge amount of time devoted to lobbying ministers and Senedd Members about the benefits of apprenticeships to individuals and businesses alike has been successful.”
However, she add: “Our members still face huge challenges with the significant reduction in the budget. Although the outlook is slightly more positive than we expected, there will still be significantly fewer apprenticeship starts next year and some very difficult decisions to take.
“While we commend the Welsh Government and Economy Minister Vaughan Gething for listening to us and revising their original draft budget, we would urge them to invest more in apprenticeships as soon as possible to maintain this flagship programme and to retain the expert and professional workforce that drives skills development in Wales.
“We also wish to put on record our appreciation of the cross-party support and backing from Welsh employers that we have received for prioritising apprenticeship funding in the budget. We are excited about the potential for growth and innovation in this space.
“Together, we can continue to support the development of a highly skilled workforce that drives economic growth and prosperity for all in Wales.”
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