The number of new UK apprenticeships dropped by 28% in the year leading to June 2018, putting more pressure on the government to address reforms designed to enable more workplace-based training.
As the Financial Times notes, in 2017 ministers introduced an apprenticeship levy in order to fund workplace-based training, though critics believe it is failing.
In the twelve months leading to June 2018, there were 341,000 new apprenticeships; this compares to 472,500 the previous year.
The government has pledged to create three million apprenticeships by 2020 across the public and private sectors, as part of its aim to improve the UK’s poor productivity record.
Head of external affairs at business lobby group the Institute of Directors, Jamie Kerr, feels there is a slim chance the government will meet its target by 2020.
“What employers want to see is a system more responsive to the needs of individual firms, particularly as skills shortages and the shifting labour market trends remain at the top of businesses’ lists of concerns,” he added.
Businesses and public sector bodies are required to pay the levy if their salary bill exceeds £3m, which is a 0.5% tax on their payroll. Those firms can then claim vouchers from the government to spend on apprenticeship courses.
Yet, since the levy came into effect in April 2017, the number of new apprenticeships has taken a nosedive.
It’s clear that employers are finding it difficult to adjust to the new arrangements, which asks companies and public sector bodies to put together apprenticeship training schemes while ensuring those schemes adhere to new standards.
Companies are struggling to spend the money they have been made to set aside to fund the apprenticeship courses. Also, some have been criticised for using the levy to send senior executives on MBA programmes.
Near the end of the last academic year, there was a rise in apprenticeship starts. In June this year, there were 22,300 new starts, compared with 14,200 during June 2017.
Apprenticeships and skills minister Anna Milton commented that the government’s “high quality apprenticeship standards” were “giving people a route to fulfilling jobs and a successful career.”
What do you think needs to happen to reverse the decline in new apprenticeships?