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Apprenticeship starts drop by 25%

18 May 2018 | By Neil Gerrard

Apprenticeship starts have fallen to a level nearly 25% than a year ago, since the introduction of the apprenticeship levy.

HEADLINE: Apprenticeship starts drop by 25%
Apprenticeship starts have fallen to a level nearly 25% than a year ago, following the introduction of the apprenticeship levy.
Official figures recorded 232,700 apprenticeships between August 2017 and February 2018, as compared to 309,000 apprenticeship starts in the same period a year before.
The sharp drop-off in starts came after the introduction in May 2017 of the apprenticeship levy, which sees companies with a payroll of more than £3m a year contribute 0.5% of that payroll to the levy fund.
The government reported that 91.7% of companies that had PAYE schemes with apprenticeship levy declarations in England over £150,000 had registered with the Apprenticeship Service, which allows employers to financially manage their apprenticeship programme.
Those companies have two years to spend their funds on training and the government said it expected starts to increase as the system became more established.
Karen Jones, group HR director at Redrow suggested increasing the first year starting wage for an apprentice in line with the national minimum wage in order to attract more people from lower-income, disadvantaged background.
She said: "The Government’s effort to boost apprenticeship uptake via the Apprenticeship Levy is commendable and whilst we need some time to understand its full impact, it appears that employers aren’t fully capitalising on the opportunity to take on apprentices. 
"It is important for employers and Parliament to iron out their differences if the levy it is to work effectively across all sectors. Construction is however bucking the trend, with apprenticeship starts rising by 49% between 2012 and 2017 according to figures released recently by the Construction Industry Training Board."Apprenticeship starts have fallen to a level nearly 25% than a year ago, since the introduction of the apprenticeship levy.

Official figures recorded 232,700 apprenticeships between August 2017 and February 2018, as compared to 309,000 apprenticeship starts in the same period a year before.

The sharp drop-off in starts came after the introduction in May 2017 of the apprenticeship levy, which sees companies with a payroll of more than £3m a year contribute 0.5% of that payroll to the levy fund.

The government reported that 91.7% of companies that had PAYE schemes with apprenticeship levy declarations in England over £150,000 had registered with the Apprenticeship Service, which allows employers to financially manage their apprenticeship programme.

Those companies have two years to spend their funds on training and the government said it expected starts to increase as the system became more established.

Karen Jones, group HR director at Redrow suggested increasing the first year starting wage for an apprentice in line with the national minimum wage in order to attract more people from lower-income, disadvantaged background.

She said: "The Government’s effort to boost apprenticeship uptake via the Apprenticeship Levy is commendable and whilst we need some time to understand its full impact, it appears that employers aren’t fully capitalising on the opportunity to take on apprentices. 

"It is important for employers and Parliament to iron out their differences if the levy it is to work effectively across all sectors. Construction is however bucking the trend, with apprenticeship starts rising by 49% between 2012 and 2017 according to figures released recently by the Construction Industry Training Board."

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