Apprenticeships warning as new starts drop by 27%

Seamus Nevin  of the IoD
Seamus Nevin of the IoD

The Government has been accused of failing to act on “growing concerns” from industry about the apprenticeship levy after new figures showed a drop in the number of new starts.

There were 114,400 apprenticeship starts for the first quarter of the 2017/18 academic year, compared with 155,600 at this time a year ago, a decrease of 26.5%.

Business leaders have been warning about the complexity of the apprenticeship levy, which came into force in April last year requiring public and private sector companies with a pay bill of more than £3 million to contribute the equivalent of 0.5% of their pay bill to deliver training.

Seamus Nevin of the Institute of Directors said: “We already know from previous statistics that there was a 61% drop following the initial introduction of the Government’s levy last April. Clearly the new system has failed to take off.

“The levy can be difficult to navigate and many employers still struggle to comprehend how the system is meant to work.

“13% of levy-paying IoD (Institute of Directors) members cannot recoup all the money they pay in because of glitches in the levy’s pricing, while a further 11% of mostly smaller payers are having to write off their payments as a tax because apprenticeships are too expensive for their available funds.”

Verity Davidge of the EEF manufacturers’ organisation said: “Today’s figures should act as a wake-up call to Government which has failed to act on industry’s growing concerns around the levy.