People starting apprenticeships fall by quarter amid frustrations over government levy

'The structure and implementation of the apprenticeship levy has acted as a barrier and brake to skills development'

There has been a 24% fall in the number of people starting in-work training after apprenticeship levy introduction (Getty)

The number of people starting apprenticeships under the government’s flagship scheme has dropped by nearly a quarter, official figures show.

The apprenticeship levy was introduced a year ago to help create three million apprentices by 2020 - but figures show a 24 per cent drop in people starting in-work training in the first half of the academic year.

Employers have been left frustrated by the “restrictions and inflexibility” of the government’s complex scheme since it was introduced in April 2017, the British Chambers of Commerce has said.

The government figures show the number of apprenticeship starts between August 2017 and January was 206,100, compared to 269,600 at the same point last year - a decrease of 24 per cent.

And in January, apprenticeship starts were down by 31 per cent compared to same period last year.

This week, Chancellor Philip Hammond admitted during treasury questions that there were fewer apprenticeship starts than they expected since introducing the levy one year ago.

Last month, research by the Institute of Directors (IoD) revealed that only one in seven employers thought the levy was fit for purpose.

It found that fewer than one in five employers will use contributions from the levy to take on more apprentices.

Jane Gratton, head of skills at the British Chambers of Commerce (BCC), said the latest figures reflected “the damaging impact” that the levy is having on training new people.

She said: “Business communities recognise that apprenticeships are a crucial tool for shaping the skills of tomorrow, but since the introduction of the apprenticeship levy they have expressed frustration at the restrictions and inflexibility of the system.

“While the aim of the levy is laudable, its structure and implementation have acted as a barrier and brake to skills development.”

Speaking at a conference on apprenticeships in London, Ms Gratton called on the government to urgently work with business to reform the levy to make it workable for businesses.

“At a time of critical skills shortages, it’s crucial that we get this right,” she said.

On the levy, Seamus Nevin, head of policy research at IoD, said: "There have been major problems with putting the funds to use in the ways and places they are needed most.

"While the intention behind the policy is right, today's stats reinforce why we need a change in how the levy is implemented.”

A Department for Education spokesperson said: “Our reforms to the apprenticeship system are about increasing the number of quality apprenticeships, so people of all ages and backgrounds can take advantage of the opportunities apprenticeships bring.

“We have recently seen an increase in the number of people starting on higher level apprenticeships, such as engineering and law, and on our new quality apprenticeship standards.

“These new apprenticeships are designed by employers themselves to meet their needs, and in a range of industries such as fashion, banking and defence.”