The apprenticeship levy has caused a sharp fall in the number of people starting training programmes, government figures have shown.
Department for Education (DfE) data showed that in the quarter following the introduction of the levy – May to June – the number of people starting apprenticeships fell by 59.3% to 69,800.
The levy currently requires all employers with an annual wage bill of £3 million or more to pay 0.5% of their staff costs into an apprenticeship fund. Businesses can then draw from the fund to finance training, which is topped up by the Government.
The DfE admitted that the dip in the number of apprenticeships was likely a direct result of bringing in the levy.
In a statement it said: “It may take time for organisations to adjust to the new funding system, and so it is too early to draw conclusions based on apprenticeship starts since May.”
Trade body EEF, which represents the UK’s manufacturing industry, blamed confusion around the levy for the decline, saying it was “complex and time-consuming”.
Verity Davidge, EEF head of education and skills policy, commented: “We’ve heard stories from companies who have hit a brick wall trying to get levy-supported apprenticeships off the ground – and not for a lack of trying. The numbers speak for themselves.”
She added: “Companies are having to tell would-be apprentices they can’t take them on because they can’t get support from the levy in time.
“That sends a dangerous message about apprenticeships when we’re trying to promote them to solve the skills shortage.”