Since the introduction of the government’s apprenticeship levy scheme earlier this year, the number of people starting apprenticeships has drastically fallen by 59 per cent.
At the end of this academic year, figures released by the Department of Education show 48,000 people started an apprenticeship between May and July 2017, compared to 117,000 for the same period last year, prompting those businesses which have been critical of the levy due to “complex rules” and “difficulty in accessing funds” to further argue that the policy is not working and deterring employers from creating apprenticeship posts.
As of 6 April 2017, employers in England with a pay bill over £3 million each year must pay the apprenticeship levy of 0.5 per of their annual wage bill into an apprenticeship fund which is topped up by the government to finance training. Firms with more than 50 employees must contribute 10 per cent towards the cost of training. The levy can be reclaimed provided businesses spend it on apprenticeships approved by the government.
The levy was created with the aim of increasing the number of people training at work in order to help tackle the skills gap, with government promising to create three million apprenticeships by 2020. It is hoped that the levy will raise around £3 billion a year towards training.