Apprenticeship starts fall as calls for levy reform renewed

Apprenticeship starts were down 25% for the seven months to February 2018—prompting further calls for the levy system to be reformed.

There were 232,700 apprenticeship starts over the seven months to February 2018, according to the Department for Education’s (DfE) latest statistics. This was significantly below the 309,000 recorded during the same period the year before.

Seamus Nevin, head of policy research at the Institute of Directors, said the figures “yet again show that the system is not working as intended”.

He said: “How much more evidence does the government need before it takes action? While the motivation behind the policy is laudable, the execution is flawed.”

“On top of the decrease in apprenticeship starts, around 40% have so far been below the standard internationally recognised as the minimum quality to be an apprenticeship. This isn’t helping to meaningfully boost the skills of British workers.”

The levy system must be reformed if the government wants apprenticeships to boost skills, productivity and wages, Nevin said.

He said: “Businesses should be afforded the flexibility to invest in more tailored courses. Firms need longer to spend the money so they can use it on the apprenticeships of greatest value. Larger companies could also be allowed to transmit more of the funds down their supply chain to where it is most needed.”

Employers with annual wage bills of more than £3 million are liable to pay the apprenticeship levy. Levy-paying employers contribute 0.5% of their pay bill into a fund each month, which can be re-invested in apprenticeship training for their business. For every £1 contributed, the government adds 10p.

An employer with an annual wage bill under £3 million doesn’t need to pay the levy—but the government will still fund 90% towards the cost of their apprenticeship training.

In March, Confederation of British Industry deputy director general Josh Hardie called a previously reported fall in apprenticeships starts proof that “the levy in its current form isn’t fit for purpose”.

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