Apprenticeship Levy Failing its First Test

Business leaders have demanded urgent reforms to how vocational training is funded after official figures revealed a 25 percent decline in the take-up of apprenticeships.

 

 

Since the introduction of the “apprenticeship levy”, which was intended to improve Britain’s skills base, the number of people starting training schemes has fallen markedly.

Preliminary figures from the Department for Education show that 194,100 apprenticeship starts were reported in England for the first two quarters of the 2017-18 academic year, compared with 258,800 a year earlier.

The decline was revealed as the first anniversary of the levy approaches. The policy, which became operational last April, requires businesses with an annual wage bill of £3 million or more to pay 0.5 percent of their payroll costs into an apprenticeship fund that they can access to pay for training. The fund is topped up with public money.

The government promised that the levy would lead to a “huge reform” of vocational training and provide more skilled workers for industry, but employers have complained that it is too inflexible and difficult to navigate.

Tim Thomas, director of employment and skills at EEF, the manufacturers’ organization, said that the figures should be “the final signal to the government that now is the time for a review and change”. He said: “Whilst manufacturers are doing their best to push through the complexities of delivering apprenticeships, greater employer flexibility in using levy funds is needed so they can expand provision.”

The CBI has called for businesses to be allowed to pool more of their levy with others nearby, or in the same sector, and to combine with local colleges to create centers for excellence for apprenticeships. The Federation of Small Businesses wants large companies to be able to share their levy allocations with suppliers more easily.

The Department of Education said that the data should be treated with caution because some training providers were yet to provide figures for this year. “Comparisons that are more accurate can be made once finalized data are published in November 2018,” it said.

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