The Leading News & Information Service For The Facilities, Workplace & Built Environment Community

New Apprentices Have Dropped Since Introduction of Apprenticeship Levy 

New Apprentices Have Dropped Since Introduction of Apprenticeship Levy 
31 October 2023

CIPD research shows that the number of apprentices starting in SMEs has dropped by 49 per cent, since the introduction of the Apprenticeship Levy in 2017.

There were 241,000 new apprenticeship starts in SMEs in England in 2016/17, compared to 123,800 in 2020/21.

Despite the number of skills shortage vacancies more than doubling in England, from 193,800 in 2017 to 460,100 in 2022, investment in training per employee in the UK has also decreased, by 19 per cent since 2011. This means that UK investment per employee is at around half that of the EU average.


What is the Apprenticeship Levy?


Initiated in 2017, the Apprenticeship Levy applies to employers with an annual wage bill of more than £3 million. 0.5 per cent of the company’s payroll each month is then charged as a levy tax, which can be reinvested into apprenticeship training. 

The Chartered Institute of Personnel and Development (CIPD) feels that the levy has “failed to reverse the decline in employer training more widely”, which was one of the policy objectives for its introduction. 

The CIPD is calling on the Apprenticeship Levy to be reformed into a “flexible skills levy”. Lizzie Crowley, Senior Policy Adviser at the CIPD, explained: “Skills and labour shortages continue to be a real problem across the UK and all sectors of the economy, and we need to get apprenticeships and vocational education right if we’re to tackle these challenges. Investment in training and development is critical in addressing skill gaps and improving workplace productivity, but the Apprenticeship Levy has failed to reverse the decline in training we’ve seen over the past two decades.

“Despite the importance of SMEs to the UK economy, there are still major barriers in their engagement with the current skills system, including its complexity, lack of resources, and poor people management capability. Good quality advisory and business support services, aimed at boosting management capability and increasing understanding of skills development, are key to engaging small businesses.

“Reforming the levy into a flexible skills levy will also help boost employer investment in the technical skills they need and free up more funding to invest in apprenticeships.”

Picture: a photograph of two people sitting at a meeting table together, with one using a laptop. Image Credit: Unsplash

Article written by Ella Tansley | Published 31 October 2023


Related Articles

Do You Mind The Gap?

The UK is suffering from a general skills shortage - and young people are typically not considering FM as a career path. This has lead to a skills gap, writes HR Director...

 Read Full Article
Why 2022 Could be the Year of Record Pay Rises

The Governor of the Bank of England recently said that we need to see “a moderation of wage rises” to stop rising inflation. However, employers in the UK...

 Read Full Article
Reform Urgently Needed For Effective Apprenticeship Levy

Urgent steps must be taken by Government to reform the Apprenticeship Levy in England, so firms can offer more of the high-quality training they need to...

 Read Full Article
The Budget 2018 - 24 Things You Need To Know

The Chancellor has presented his Budget to Parliament – here's a summary of what was announced...but we've tried to put it in order of relevance to the FM...

 Read Full Article
Mitie Donates £2m of Unspent Apprenticeship Levy Funds to SMEs

Mitie has pledged £2 million in Apprenticeship Levy gifting funds to help plug skills gaps in the engineering, construction, data, and digital sectors. As a...

 Read Full Article
Menopause Support in Workplaces Becomes Legal Right 

New guidance from the Equality and Human Rights Commission means that companies must provide reasonable workplace adjustments if menopause symptoms have a substantial...

 Read Full Article
1 in 5 Neurodivergent Employees Experience Discrimination at Work

CIPD research shows a potential link between neurodiversity and harassment at work. In a survey of over 1,000 workers, 790 people considered themselves to be...

 Read Full Article
NG Bailey Opens Nationwide Apprenticeship Programme

NG Bailey is offering around 70 apprenticeship places across its business for 2024. Placements are available across electrical, mechanical and technical areas, as well...

 Read Full Article
British Cleaning Council Urges Companies to Gift Unused Apprenticeship Levy Funds

The British Cleaning Council is appealing to large cleaning businesses to gift or transfer unused apprenticeship levy money to smaller organisations. The...

 Read Full Article
ABM Launches Sixth Year of Junior Engineering Engagement Programme 

Facilities provider ABM is again engaging with 11-12-year-olds to promote the world of engineering and facilities management. The Junior Engineering Engagement...

 Read Full Article