The number of people starting apprenticeships have fallen sharply, following the introduction in April of the apprenticeship levy.
The latest Department for Education figures showed that there were 48,000 apprenticeship starts in the last three months of the 2017 academic year. That was down 59% from 117,000 the year before.
Every business with a payroll bill above £3m – including payments such as bonuses – pays 0.5% of it towards apprenticeship training.
The government hopes that the levy will raise £2.5b a year for training, with the aim to fund up to three million new apprenticeships.
Minister of State at the Department for Education Robert Halfon said: “Initially the number of starts has gone down, but I suspect over the coming year they will go back up again.”
Jill Whittaker, managing director of HIT Training, which provides apprenticeship training in the hospitality sector, said: “Levy-paying employers are taking the time to ensure they get the best value programme for their levy funding, which is reflected in the apprenticeship start figures. As businesses have 24 months from May 2017 to use their levy fund, there isn’t an incentive to rush this process. For smaller employers, who won’t be paying the levy, they are adjusting to the new system where a 10% contribution is required towards apprenticeships. While this is excellent value for money, businesses need to think hard about spending in today’s economy.
“That being said, we’re already seeing numbers pick up – especially in the hospitality industry. In May, starts were at 25% of the same month in 2016; by October that increased to 80%. Employers are getting used to the flexibilities they can get from the new apprenticeship standards, and the good news is we’ve already had two learners complete the full end point assessment. Now this has taken place, the confidence in apprenticeships will grow and we will see numbers not only return to normal but increase in the New Year. This is down to the hospitality industry’s ability to adapt to the new system and we should be proud to be leading the way, using the levy to fund the workforce of the future.”
But Association of Employment and Learning Providers chief executive Mark Dawe said: “There needs to be appropriate flexibility of off-the-job training. In addition, employers without levy funding should not be charged for training 16-24 year old apprentices. Without these actions, we do not believe the government will reach their manifesto commitment.”
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