Delays to plans to reduce the amount small and medium-sized enterprises (SMEs) have to pay towards apprenticeship training is acting as a “barrier” to growing the number of new apprentices, training providers fear.
In his Budget speech in October, chancellor Philip Hammond announced that the contribution non-levy paying companies have to pay towards apprenticeship training would fall from 10 per cent to 5 per cent.
Mr Hammond said this co-investment would be reduced at a cost of up to £240 million to the Treasury. However no date was announced in the Budget for the changes and, more than two months on, a Treasury spokesperson told Tes only that a date for the change will be announced “in due course”.
Mark Dawe, chief executive of the Association of Employment and Learning Providers (AELP), which had been calling for the full cost of apprenticeships for SMEs to be covered by the government, said the changes should have happened already “especially as two months have passed since the Budget announcement”.
'Smaller employers see no point in investing'
Mr Dawe added: “Smaller employers see no point in investing in starts at the current higher rate, so the lack of action is acting as a further barrier to growing the programme.”
Figures released last September show that in the first full academic year since the apprenticeship levy was introduced, the number of apprenticeship starts was down by a third – 341,700 starts were reported between August 2017 and June 2018 for the 2017-18 academic year, which is down 28 per cent on the 2016-17 total of 472,500 starts. In 2015-16, there were 458,500 starts.
At the Conservative Party conference in October, the chancellor announced further reforms to apprenticeship programme.
Larger levy-paying employers will be able to transfer 25 per cent of their unspent funds in their apprenticeship levy accounts to companies in their supply chain, an increase from the 10 per cent the government had already announced in June. It is expected this change will come into effect this April.