The Institute for the Motor Industry has called for a more pragmatic approach to apprenticeships after concluding that the Government’s Apprenticeship Levy remains “too complex, restrictive and inflexible”.
The latest Government figures show that the number of new apprenticeship starts had declined by 25% during the first two quarters of the 2017/18 academic year, with just 194,100 reported for the, compared to 258,800 during the same period in 2016/17.
IMI chief executive, Steve Nash, has said that many of its clients still consider the Apprenticeship Levy system as an added tax as they struggle to overcome complexities which make taking advantage of funding difficult.
He said: ““Too many employers have struggled to get the training they actually want and need for their businesses approved for re-claim against their levy payments.
“This is why many are simply regarding it as a tax and have disengaged. That’s a great shame because the introduction of the levy should potentially have resulted in new apprenticeships being offered in a great many sectors and occupations where they haven’t previously existed.”
A Freedom of Information Act by the Open University recently revealed that, of the £1.39 billion paid into the levy by English businesses, just £108m had so far been drawn down.
In his spring statement, the Chancellor of the Exchequer, Philip Hammond, acknowledged the issues being experienced by SMEs and committed £80 million to help them find their way through the system.
But Nash said that more needs to be done to turn-around employers’ opinions of the Levy in order to arrest the slide in new apprenticeship starts.
He said: “With new apprentice numbers still showing a significant decline the government must accept that some of the processes surrounding the levy are too complex, restrictive and inflexible, which is just what the CBI have been saying.
“Whilst the apprentice numbers in automotive are not down as much as in other sectors, they are still much lower than they should be and don’t reflect the real demand that exists for new, young talent.
“A number of our large employers have told us directly that their apprentice recruitment has fallen short of their true business needs, simply because they haven’t found the new processes to be easy to understand and negotiate.
“The IMI is committed to working with employers to help them through the transition from the old Apprentice Frameworks to the new Standards, and I do believe that we can get back to the numbers that accurately reflect demand in the sector – especially now that we have a broad range of new standards approved and available for both light and heavy vehicles.
“Overall a more pragmatic approach from the Institute for Apprenticeships (IFA) – which is the body that governs the new apprenticeships – would help to achieve greater employer engagement across all sectors of business.”