Business

Levy under fire as apprenticeship numbers sink again

The government is expected to unveil a further drop in number of new apprenticeships being created across the UK, casting doubt over a controversial levy intended to boost training in the workplace.

Last month the Department for Education reported a 24 per cent fall in the number of apprenticeship starts in the first six months of the academic year. The announcement marked one year since the introduction of the apprenticeship levy, which applies to organisations with payrolls in excess of £3m a year.

The latest apprenticeship figures will be published this morning. City A.M. understands the rate of starts will again be down on the previous year.

Read more: Apprenticeship starts drop as levy criticised as "unfit for purpose"

"The new apprenticeship system isnt working as intended," said Seamus Nevin from the Institute of Directors.

"Businesses need more flexibility to invest in more tailored courses. Larger companies need to be able to pass more of the funds down their supply chain to the places it is really needed, and firms must have longer to use the money, so that it is spent on the most valuable apprenticeships."

Companies have left more than £1bn of apprenticeship funding untouched according to data released last month by the Open University. It said that while £1.39bn had been paid into new National Apprenticeship Service accounts, only £108m had been withdrawn.

Originally unveiled by former chancellor George Osborne in 2015, the levy was intended to fund three million apprenticeships. It has been criticised by business groups who say it will not have the desired effect.

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