Apprenticeship starts drop by nearly a quarter as levy criticised as “unfit for purpose”
One year on since its introduction, the apprenticeship levy is facing intense criticism after the latest government figures show there has been a 24 per cent drop in new apprenticeship starts.
In the six months to January 2018, 206,100 people started training schemes, compared with 269,600 in the same period the previous year, data from the Department for Education (DfE) showed.
The scheme, which was supposed to create 3m new apprenticeships by 2020, was formulated by former chancellor George Osborne and put in place in April 2017, but business groups have warned it needs urgent reform.
Read more: Business groups slam apprenticeship levy as firms fail to withdraw funds
Seamus Nevin, the head of policy research at the Institute of Directors (IoD), said today’s figures add to a “growing body of evidence that the apprenticeship levy is not working as the government intended”.
While there are good intentions behind the policy, there have been “major problems with putting the funds to use in the ways and the places they are needed most,” he said.
Nevin added:
The IoD has been urging the government to reform the system so that larger companies can pass more of the funds down their supply chain to the places it is really needed, and to give firms longer to use the money, so that it is spent on the most valuable apprenticeships and on subjects where there are the biggest skills shortages.
In a speech today, Jane Gratton, the head of skills at the British Chambers of Commerce (BCC) said the scheme is unfit for purpose and causes “confusion and frustration” among employers.
“Businesses recognise that apprenticeships are a crucial tool in shaping the skills of tomorrow, but the current restrictions and inflexibility of the system make it unfit for purpose. For many levy payers it feels like a tax, or redirects funds set aside for other forms of workplace training,” Gratton said.
“The aim of the apprenticeship levy is laudable, but its structure and implementation are obstacles to training the talent of tomorrow.”
However, Petra Wilton, the director of strategy at the Chartered Management Institute (CMI), added that an uptick in new starts could still be on the cards this year.
“While the number of apprenticeship enrolments have predictably dropped as employers get to grips with changes to the system, CMI research shows that, nationally speaking, nearly half of all managers expect to see a rise in new starts over the next 12 months,” Wilton said.
A DfE spokesperson said: “Our reforms to the apprenticeship system are about increasing the number of quality apprenticeships, so people of all ages and backgrounds can take advantage of the opportunities apprenticeships bring.
“The apprenticeship levy is an important part of these changes to raise the quality of apprenticeships in this country, creating long-term, sustainable investment in training and education. Nearly 60 per cent of people starting on the new apprenticeship standards are levy supported, showing that levy payers are working well with the new system.”
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