SJD Accountancy

ICT apprentices falls for third consecutive year while applications surge

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The number of people starting ICT apprenticeships has reached its lowest level in three years, despite a surge in candidates actively seeking work in the ICT sector, according to data obtained by SJD Accountancy, the UK’s largest tax advisers and accountants to IT contractors.

The official figures from the Skills Funding Agency, a government body, show that 13,060 people started ICT apprenticeships in 2013/14, a decline of 33% from 2011/12, when 19,520 students started apprenticeships.

At the same time the number of applications for ICT apprenticeships has almost trebled, from 48,350 in 2010/11 to 133,800 in 2013/14. There are now over 10 applicants for every ICT apprenticeship compared to 2.5 in 2010/11.

Derek Kelly, Chief Executive Officer of SJD Accountancy, comments: “The Government has made apprenticeships a policy focus for a number of years, but despite us noticing an upward trend in the number of roles for IT contractors,  the number of apprentices in the IT sector is on a worrying downward trend.”

“The UK tech sector has been one of the star performers of the economy in recent years and has created significant demand for fresh talent.  It is therefore vitally important that we continue to bring young talent into the industry. The jump in apprenticeship applications shows that there is growing appetite among candidates for careers in ICT. The concern is that employers are not being provided with the right encouragement to take on and train young professionals.” 

He adds: “The UK has historically suffered from an underproduction of IT skills. It is therefore critical that the talent pipeline is kept full and apprenticeships have a key role to play in bringing fresh blood into the industry.”

SJD Accountancy says that the tax break announced in the Autumn Statement, which will abolish employer National Insurance contributions (NICs) on earnings up to the upper earnings limit for apprentices aged 25 and under from 6 April 2016, may reverse the downward slide in the number of ICT apprenticeships. The tax break is projected to cost the Treasury £490 million between 2016 and 2020.

Derek Kelly, Chief Executive Officer of SJD Accountancy, comments: “Training and updating skills is critical in the IT sector. Apprenticeships are a very effective way for employers to equip people with the latest skill sets and so this tax break is welcome news.”

“The focus on apprenticeships is laudable but the vast majority of apprentices are young. Much more could be done to help senior IT professionals update their skills and increase their market value. If training was a tax deductable business expense, both contractors and permanent IT professionals would benefit, and the match between the skills of people in the workforce and the skills end users need would be improved.”

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