Last reviewed 14 November 2023
It would be fair to say that the Apprenticeship Levy has not enjoyed total support in recent years (see Survey highlights support for more flexible Apprenticeship Levy, Adult skills spending down by a third in 20 years and Firms failing to invest in UK workers).
Now the Chartered Institute of Personnel and Development (CIPD) has produced a report which shows that the number of apprentices starting in small businesses has plummeted since the introduction of the levy in 2017.
Available here, Devolution and Evolution in UK Skills Policy notes that there were 123,800 apprenticeship starts in SMEs in England in 2020/21, compared to 241,000 in 2016/17, a fall of 49%.
It also shows a 14% fall in apprenticeship starts in large firms, those with 250 or more staff, and that, overall, apprenticeship starts have fallen 31% in England since the levy was introduced. Investment in training per employee in the UK has declined by 19% since 2011, from £2191 to £1778, with UK investment per employee at around half that of the EU average.
The CIPD's analysis further highlights that the Apprenticeship 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 therefore calling on the UK Government to move to a flexible skills levy in order to boost employer investment in training and skills development.
CIPD Senior Policy Adviser, Lizzie Crowley, said: “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.”
The CIPD wants the Government to refocus the scope of apprenticeship policy to include a discussion on direct financial incentives, alongside an emphasis on funding off-the-job training costs. For small business in particular, apprentice hiring incentives can make a difference, it points out.
The Government should also introduce fast-track routes to apprenticeship qualifications for adults with existing workplace skills, it concludes.