Levy drives down apprenticeships by nearly two thirds

There were 43,600 new apprenticeships between May and July down from 113,000 for the same period in 2016

There were 43,600 new apprenticeships between May and July down from 113,000 for the same period in 2016 Christopher Furlong Getty Images

But figures released on Thursday by the Department for Education showed there were just 43,600 apprenticeship starts between May and July of this year, down from 113,000 over the same period in 2016.

All apprenticeship starts from May (with the exception of 16 to 18 year-olds at employers with fewer than 50 employees) will have involved, for the first time, a mandatory financial contribution from the employer, either from the levy account or the 10 percent co-investment. "Government should reconsider the current funding arrangements and incentives for taking on younger apprentices, recognising that this group needs more support as they move into the workplace for the first time".

Shadow Skills Minister Gordon Marsden said: "These appalling statistics are a damning indictment of the Government's failure to give the necessary time, focus and resources to their apprenticeship programme". "We have consistently warned, alongside sectors leaders such as the AELP, that the government's lackadaisical approach to the introduction of the levy would damage the apprenticeship programme".

Mark Dawe, chief executive of the Association of Employment and Learning Providers told FE Week: "Sadly we saw these numbers coming long before the levy even started because of the way the new funding system has been designed". Until we see the September starts, we don't know whether the three million target is under threat but the numerical target isn't really important here.

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Since April any company with a wage bill of more than £3 million must pay a 0.5 per cent levy to cover the costs of apprenticeships.

"Businesses believe in apprenticeships but there can be no argument now - reform of the levy system is needed urgently to ensure its success", Carberry said, adding that challenges of the levy ran deeper than timing.

"Firms are still having to adjust to the new system against hard timescales, but the challenges of the levy run deeper than just a timing issue". The government must invest now in the Department for Education's commercial skills, work with firms to build a better understanding of how businesses will react to policies, and empower the Institute for Apprenticeships to challenge underperforming aspects of system design. As the Government has highlighted, apprenticeships are crucial if we are to tackle the skills shortage and increase the social mobility of our young people. "In the long-term, the right choice is to evolve the system into a flexible skills levy".

University and College Union general secretary Sally Hunt said: "Ministers must be concerned by this drop, which seriously undermines efforts to improve social mobility".

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"We know that the past year has been a period of huge change for employers but it is right that they are taking their time to plan ahead and maximise the opportunities the apprenticeship levy can bring".

"Some smaller training suppliers have also deferred implementation until funding becomes available next year".

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