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Number of apprenticeships fall as new levy is introduced

The number of people starting apprenticeships had increased year on year since new apprenticeship schemes were introduced under David Cameron's government, in 2013

However, the new apprenticeship levy, introduced in April this year, which requires UK employers to make a financial contribution towards the costs of training and assessing apprentices, may have killed off the last of this growth.

The apprenticeship levy takes 0.5% of the employer’s total employee pay bill (less Class 1 National Insurance contributions), but only applies to those employers whose paybill is over £3 million per annum. The belief was that this threshold would mean that the scheme would only hit a minimal number of apprenticeships.

The idea behind the levy is that it would provide an extra pot of funds for training, and give employers additional flexibility with how best to fund and structure their apprentices’ training.

However, disappointing figures from the Department for Education suggest that the number of people starting apprenticeships in England have fallen by 59% since April, suggesting a direct link between the number of apprenticeships offered and the increase in cost for employers.

Whilst the DfE states that the decrease in numbers was expected and should only be a short term issue, there are concerns from other industry heads that the levy has simply made apprenticeships too complex, and that it has now become too difficult to get levy-supported apprenticeship schemes up and running.

This has resulted in some apprentices having their apprenticeships placed on hold, or even withdrawn entirely – clearly a huge disappointment for them and their employers.

However, others suggest that this is simply as the government believes, a short term stumbling block, as employers start to understand and get to grips with the opportunities that are indeed offered by the new apprenticeship system.

Keeping an open dialogue between government, apprenticeship awarding bodies, employers and providers is likely to prove key to ensuring that apprenticeships remain a vital tool for the progression of the UK workforce.

It has seen young people thrive in new opportunities to expand their skills whilst earning – a key element of keeping their job satisfaction high and ensuring that they have the skills to help their employers remain productive and competitive.

What remains clear is the government’s intention to keep the apprenticeship scheme, and the apprenticeship levy, under review, to ensure that there is flexibility and the ability to change if necessary.

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