The drop in apprenticeship starts since the introduction of the levy is getting even more severe, the latest government statistics reveal.
In February 2018 there were 21,800 apprenticeship starts – down by 40 per cent from the 36,400 starts in February 2017 reported at this point last year.
The drop is even more pronounced than that reported in January, when the decline in starts stood at 31 per cent.
Overall, there were 232,700 apprenticeship starts between August 2017 and February 2018 – down by 25 per cent from the equivalent period in 2016-17.
The figures are provisional, with the final data due to be published in November.
'Action must be taken'
Mark Dawe, chief executive of the Association of Employment and Learning Providers, said: "The levy itself isn’t the problem but as MPs on the Commons Education Select Committee made clear to the minister on Tuesday, the manner of its implementation is letting down thousands of SMEs and young people across the country.
"Our simple solution has been sitting on the minister’s desk for months, namely that for the time being the government should stop charging small employers for taking on young apprentices at levels 2 and 3. Action must be taken now if the government wants to achieve its [3 million apprenticeships by 2020] manifesto target."
Stephen Evans, chief executive of the Learning and Work Institute, said: "Alarm bells will surely be ringing in government, whatever their outward confidence, as apprenticeship starts remain well down on last year.
"Are employers taking their time to adapt to the new system, or has quality increased as the government now argues, or is there a fundamental flaw? In truth, it's likely a mix of all three. The levy is an important and welcome change, but quality and access will be the ultimate measures of success, not starts.
Petra Wilton, director of strategy for the Chartered Management Institute, said: “Employers are clearly having problems with the bureaucracy of the apprenticeship levy but this means it must be reformed, not scrapped.
"It’s not surprising that the number of apprenticeship starts continues to drop since the success of the programme is pegged to the Levy. We need to make it easier for employers to use the levy to invest in much-needed skills, like management and leadership. Doing so will be essential for businesses to succeed in a post-Brexit service economy.”
'Won’t sacrifice quality'
Apprenticeships and skills minister Anne Milton said: “The number of people starting on the old style apprenticeships has fallen, but the number of people starting on our new, higher-quality apprenticeships are increasing well beyond our expectations. We won’t sacrifice that quality to increase quantity... We are unapologetic about our ambition to make sure that everyone, regardless of their background, can access high quality apprenticeship opportunities. That’s what our changes to apprenticeships in this country are all about.”
Founder of the education and social mobility charity Sutton Trust Sir Peter Lampl said: “High-quality apprenticeships offer genuine alternatives to A levels and degrees so it is good to see progress on the number of starts at higher levels.
"The government is right to focus on creating more high-quality routes and it is vital that young people from low and moderate income backgrounds access them. Our polling shows that there is an ingrained negative attitude to apprenticeships amongst teachers, parents and young people which must be urgently addressed.”