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Number of people starting apprenticeships in UK plunges

Number of people starting apprenticeships in UK plunges

October 12
16:15 2017

The number of people starting apprenticeships in Britain has plunged 61 per cent year-on-year since the government introduced reforms forcing companies to pay for them.

Preliminary statistics published by the government on Thursday show that 43,600 people began an apprenticeship between May and July of this year, compared with 113,000 in the same period last year.

However, there was a sharp uptick in apprenticeships in the quarter before a new payroll tax called the “apprenticeship levy” was introduced in April, which suggests uptake may have been distorted by the reforms.

The apprenticeship levy applies to all employers in the UK with a wage bill of more than £3m. It is set to raise about £2.8bn for the Treasury by 2019-20. Employers can reclaim their levy money, but only if they spend it on government-approved apprenticeships.

The government report, published on Thursday, said it may be taking time for employers to adjust to the new funding system, so it was “too early to draw conclusions” about the success of the reforms.

The preliminary figures will nevertheless be a concern for the government, which has promised to create 3m apprenticeships by 2020 in pursuit of a more productive economy.

Businesses, which have been largely critical of the levy, said the data showed the policy was not working.

“There can be no argument now,” said Neil Carberry of the CBI, Britain’s biggest business lobby group. “Reform of the levy system is needed urgently to ensure its success.”

Both the CBI and the British Retail Consortium said the government needed to introduce more flexibility into the system.

Mark Dawe, chief executive of the Association of Employment and Learning Providers, said the government would be “negligent” if it did not respond immediately by taking a “hard look at the barriers which are putting off employers from taking on apprentices, such as the level of financial contribution required from them and the amount of time mandated for off-the-job training within an apprenticeship”.

The Federation of Small Businesses, meanwhile, said the new system had caused difficulties for smaller companies that do not pay the levy.

“Small businesses have a key role in providing apprenticeships across the whole of England and particularly for younger workers, with 70 per cent of those firms that have an apprentice taking on 16 to 19-year-olds,” said Mike Cherry, the FSB’s national chairman. “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.”

Gordon Marsden, Labour’s shadow skills minister, said the “appalling statistics” were a “damning indictment” of the government’s apprenticeship programme.

The Department for Education said: “Our apprenticeship reforms have put control back into the hands of employers so they will gain the skilled workforce they need to compete globally, and the effectiveness of them should not be judged on a period of three months.

“We know that the last 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. Feedback we have had from levy payers has shown they are doing this and they plan to increase their demand for apprenticeships.”

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