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Government apprenticeships target ‘does not look possible’ after fall in uptake

An automotive apprentice at work

The continued decline in the uptake of apprenticeships has prompted business chiefs to suggest that the Government’s target of creating three million new apprenticeships by 2020 “does not look possible”.

The Department for Education revealed a 34% decline in the number of people taking up an apprenticeship, to 290,500, during the first nine months of 2017/18.

In February AM reported how DfE figures for the first quarter of the 2016/17 academic year showed 155,600 apprenticeship new starters, falling to 114,000 in the same period in 2017/18,

The DfE said at the time that the decline was “likely to be associated with the introduction of the apprenticeship levy in April 2017”.

Commenting on the latest published decline in apprenticeships Edwin Morgan, director of policy at the Institute of Directors, said: “We now have a full year’s worth of Apprenticeship Levy data, and the results do not make for pleasant reading. On this trajectory, it does not look possible for Government to meet its target of 3 million starts by 2020.

“From the beginning, businesses have raised valid concerns around the complexity and rigidity of the system.

“The Government recently announced it would allow greater scope for firms to pass Levy funds through their supply chain, and we hope that this is the beginning of further reforms that make the Levy work for both employers and apprentices.

“Improving skills is a leading concern for our members. It’s now time for Government to rethink the approach and work with businesses to turn the levy from a drag on apprenticeships into a system that delivers the right skills in the right places.”

Under the Government’s Apprenticeship Levy, any business with an annual payroll of more than £3m is required to pay 0.5% of its total wage bill – minus a £15,000 allowance – into a fund it can then draw on to fund approved training schemes.

Despite repeated calls from the motor retail industry for the scheme to be delayed, the Government introduced the levy in April 2017 in an attempt to meet a commitment to three million apprenticeships starting in England between 2015 and 2020.

Every one of the AM100 qualifies to pay the Levy by virtue of payrolls of above £3 million and a combined spend on staff of about £3.9 billion.

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