New apprenticeship starts fall, levy blamed

Annette McGill

New figures (PDF) released by the Department for Education show that there has been a 24% fall in apprenticeship starts for the 2017/18 academic year, compared with the previous academic year.

Figures show that there were 375,800 apprenticeship starts in 2017/18, compared with 494,900 in 2016/17 and 509,400 in 2015/16, a decrease of 24% and 26% per cent respectively.

The drop in the number of new apprentices has prompting calls for an urgent review of the apprenticeship levy. The levy is a tax paid by companies with an annual payroll of more than £3m. The tax can be claimed back to pay for apprenticeships.

Large construction firms object to the levy because they already pay a training levy to the country’s Construction Industry Training Board, while smaller firms say that the claim process is too complicated and time-consuming.

Faced with poor take-up and widespread criticism, the government in October announced extra funding and changes to the apprentice system. An extra £90m of government funding would be made available to enable employers to spend a quarter of their apprenticeship funds on people working for businesses in their supply chain, while the Institute for Apprenticeships would receive an additional £5m to introduce new standards and update existing ones.

Chancellor Philip Hammond also said the government would seek views on the operation of the apprenticeship levy after 2020 to ensure it supports the development of the skilled workforce businesses need.

But with the release of the latest figures, critics say the government must do more. The Federation of Master Builders (FMB), the UK trade body for small and medium-sized construction firms, says the the fall in apprenticeships is due to the levy's inflexibility. Brian Berry, Chief Executive of the FMB, said: “Apprenticeships are falling and the Government must take urgent action to reverse the decline. At the recent Conservative Party Conference, the Government announced much-needed reforms to the Apprenticeship Levy but these do not go far enough. “

He added: “If the Government is serious about creating three million quality apprenticeships by 2020, it must ensure the Apprenticeship Levy works for the construction industry.”

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