Apprenticeship starts plummet after levy introduction

6 December 2018 | By Neil Gerrard

The number of apprenticeship starts plummeted by 24.1% in the 2017-18 academic year, new figures show.

There were 375,800 apprenticeship starts in 2017/18, compared with 494,900 in the year before, according to the Department for Education.

Compared to the 2015/16 academic year, apprenticeship starts in 2017/18 fell even further – down 26.2% on the 509,400 starts that year.

The fall follows the introduction in May 2017 of the apprenticeship levy, into which companies with a pay bill of over £3m a year have to pay.

Quarterly apprenticeship starts from May 2015 (Source: Department for Education)

The Department for Education said that as of January 2018, 91.7% of those who had PAYE schemes with apprenticeship levy declarations in England of over £150,000 had registered on the Apprenticeship Service.

Those firms have two years to spend their funds and the government claimed that “as the new system becomes more established, such changes are likely to significantly impact on apprenticeship starts being reported”.

But Brian Berry, chief executive of the Federation of Master Builders (FMB) said: “Apprenticeships are falling and the government must take urgent action to reverse the decline. At the recent Conservative Party Conference, the Government announced much-needed reforms to the apprenticeship levy but these do not go far enough.

“From April 2019, large firms will be allowed to pass 25% of levy vouchers down through the supply chain to smaller firms but the FMB is calling for this to be increased to 100%. This is an important change because in construction, it’s the smaller firms that train more than two thirds of all apprentices.”

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