Around 114,000 people began an apprenticeship in August, September and October 2017, a significant decrease on the figures reported for the same period in 2016.
The goal of the government’s Apprenticeship Levy, which obliges UK businesses with wage bills in excess of £3m to pay 0.5% of that bill, was to boost the number of apprenticeships by 3 million by 2020.
Almost a year on from its introduction, and the latest (provisional) figures published by the Department for Education make for sombre reading.
On the surface, the news may appear positive. The number of people starting an apprenticeship has risen compared to the three months immediately following the introduction of the apprenticeship levy last April – which showed an almost 60% drop.
Yet, today’s figures are far more pertinent, as the three-month period of August, September and October is when the majority of apprenticeships commence.
EEF’s head of Education and Skills Policy, Verity Davidge commented: “Today’s figures should act as a wake-up call to government which has failed to act on industry’s growing concerns around the Apprenticeship Levy.
“The fact that the drop isn’t as huge as the previous quarter is by no means a cause for celebration as the numbers are a snapshot of the time when most apprenticeships begin. The only ray of hope we can find the is the increase in the number of higher apprenticeships.”
Davidge continued: “This worrying trend is not just hampering employers’ ability to get the skills their business needs, it is taking away invaluable opportunities for the next generation to undertake training and secure a future job.
“It is clear the Apprenticeship Levy and wider reforms aren’t working and need a radical rethink. Government must listen to business concerns and ensure the Levy delivers the demand-led system that was promised to employers.”
Figures for Academic Year Q1 2017/18:
- 114,400 apprenticeship starts, a decrease of 26.5%from 155,600 reported in Q1 2016/17
- 52,000 at intermediate level, a decrease of 38.1% from 84,000 in Q1 2016/17
- 50,800 at advanced level, a decrease of 18.8% from 62,500 in Q1 2016/17
- 11,600 at higher level, an increase of 26.8% from 9,100 in Q1 2016/17
- 46,600 were aged under 19, a decrease of 20.0% from 58,300 in Q1 2016/17
- 67,800 aged 19 and over, a decrease of 30.4% from 97,400 in Q1 2016/17
Apprenticeship Levy: “Additional tax”
Four months on from the introduction of the Apprenticeship Levy, the CEO of Nottinghamshire-based Icon Aerospace Technology, Tim Pryce sat down with The Manufacturer to explain what the Levy means for an SME – albeit one swiftly growing into medium-sized.
He commented: “Icon is providing some 1,800 man-hours a month of training across the board, around 80% of which is focused around long-standing employees, and none of it can be claimed against the Apprenticeship Levy.
“Why? Because courses have to be run by certain bodies, and they either haven’t got their courses ready or those courses aren’t appropriate for us.
“I think the intent of using money and encouraging companies to invest in employees’ skills is absolutely great; however, certainly in its first year of operation, the Levy seems to be nothing more than an additional tax.”
Icon has around a dozen employees undergoing NVQ Business Improvement training as part of the business’ continuous improvement programme, branded i4 – Improvement, Insight, Intelligence, and Inspiration.
Several more are taking NVQs in management and supervision. As a result, workers become capable of higher level tasks. Valuable to the business they may be, yet, these are the sort of qualifications currently not recognised by the Apprenticeship Levy, therefore Icon can’t claim against them.
It’s ironic, Pryce noted, that the more successful Icon becomes – creating new jobs, long-term careers, contributing to the local community and the national economy – the more it will be penalised by the Levy in its current form.