Apprenticeships fall sharply following levy introduction

The number of apprenticeships in the UK has fallen since the introduction of the Government’s controversial Apprenticeship Levy, a report has revealed.

Figures, published by the Department for Education (DfE), show that in the second quarter, the number of people starting apprenticeships fell by 59.3 per cent to 69,800.

The levy is designed to fund the Government’s pledge to create three million apprenticeships by 2020. Employers with a wage bill of £3 million or more each year are required to pay the levy – charged at 0.5 per cent of their annual pay bill.

Earlier this year, a study looked into the effectiveness of the Apprenticeship Levy and how companies were using it. It revealed that almost half of all businesses were simply writing off the levy as any other tax. Its figures showed that just 10,500 businesses registered to receive apprenticeship vouchers, compared to the 19,150 businesses paying the levy.

Commenting on the latest statistics, the DfE said it may take time for organisations to adjust to the new funding system, so it is “too early to draw conclusions based on apprenticeship start since May”.

Verity Davidge, head of education and skills policy at trade body EEF, described the levy as “frustrating”.

“Accessing the funding has proven complex and difficult to unlock in time, and employers have struggled to get their heads around the complex rules and restrictions in accessing funds,” she said.

“As a result some apprentices have been told that their apprenticeship has been put on hold for now, which is clearly a huge disappointment for young people who had effectively been offered a job – only to have their hopes dashed.”