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Apprenticeship starts plummet 31 per cent since introduction of levy, CIPD report reveals

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Summary

The CIPD's Devolution and evolution in UK skills policy report has revealed that the number of people starting apprenticeships in England has fallen by 31% since the introduction of the apprenticeship levy in 2017, with even steeper drops for small businesses. Critics have claimed that the levy has led to employers putting existing staff on to professional or managerial apprenticeships rather than taking on new apprentices, and is inflexible and complex to navigate. The CIPD is calling for reform of the levy into a flexible skills levy to help address the decline in training investment and labour shortages in the UK, as well as the introduction of fast-track apprenticeship qualifications and financial incentives for businesses that hire apprentices.

Q&As

What is the impact of the apprenticeship levy on the number of apprenticeship starts in England?
The number of people starting apprenticeships has fallen 31 per cent in England since the apprenticeship levy was introduced in 2017.

What criticisms have been made of the apprenticeship levy by employers?
Critics have claimed it has led to employers putting existing staff on to professional or managerial apprenticeships rather than taking on new apprentices, as well as being inflexible and complex to navigate.

What are the implications of the decrease in apprenticeship starts for employers facing talent and labour shortages?
The decrease in apprenticeship starts has implications for employers facing talent and labour shortages, as it means there are fewer people available to fill job vacancies.

What reforms does the CIPD recommend to the apprenticeship levy to improve apprenticeships and workplace productivity?
The CIPD recommends reforming the apprenticeship levy into a “flexible skills levy”, introducing fast-track routes to apprenticeship qualifications, providing financial incentives for businesses that hire apprentices, and offering government support for advisory services covering HR and people management for SMEs.

What other measures does the CIPD suggest to increase the number of apprenticeships?
The CIPD suggests providing financial incentives for businesses that hire apprentices, and offering government support for advisory services covering HR and people management for SMEs.

AI Comments

👍 It's great that the CIPD is looking into the apprenticeship levy and ways to reform it to benefit businesses and people looking to enter the workplace.

👎 It's concerning that employers are training and investing less in their workforces than they were 20 years ago and that the apprenticeship levy is not working on the ground.

AI Discussion

Me: It discusses the implications of the apprenticeship levy in England. The number of people starting apprenticeships has declined by 31% since the levy was implemented in 2017, and the CIPD's Devolution and Evolution in UK Skills Policy Report suggests that it's particularly acute for small businesses. The levy was meant to help companies hire more apprentices, but critics have claimed that it's inflexible and complex to navigate. The CIPD is recommending that the levy be reformed into a “flexible skills levy” to help boost employer investment in the technical skills they need and free up more funding to invest in apprenticeships.

Friend: That's really concerning. It seems like the levy has had the opposite of the desired effect, and it's really impacting small businesses.

Me: Exactly. And it's only exacerbating the talent and labour shortages that the UK is already facing. We need to find a way to address this quickly in order to give young people access to the training and apprenticeships they need.

Action items

Research the apprenticeship levy and its impact on businesses and employees.
Reach out to local businesses to understand their experience with the apprenticeship levy and how it has impacted their ability to hire apprentices.
Contact local training providers to understand how the apprenticeship levy has impacted their ability to provide apprenticeships and how it can be reformed to better benefit businesses and those looking to enter the workplace.

Technical terms

Apprenticeship Levy: A tax introduced in 2017 to help companies hire more apprentices by giving them greater control over government funding for apprenticeships.
SMEs: Small and medium-sized enterprises.
CIPD: Chartered Institute of Personnel and Development.
Devolution and evolution in UK skills policy report: A report published by the CIPD which examines the impact of the apprenticeship levy on the number of people starting apprenticeships in England.
Fast-track routes: A system of accelerated learning which allows apprentices to complete their qualifications in a shorter amount of time.
Financial incentives: Financial rewards or benefits given to businesses for hiring apprentices.
Exit interview: A meeting between an employer and an employee who is leaving their job, to discuss their experience of working for the company.