‘Employer investment in training down due to apprenticeship levy’

EMPLOYER INVESTMENT in training has fallen since the introduction of an apprenticeship levy, according to a new study.

As the levy nears its fourth anniversary, the Chartered Institute of Personnel and Development (CIPD) said its assessment was “damning”.

The professional body for HR said apprenticeship starts have fallen and far fewer have gone to young people.

The CIPD urged the Government to announce it is reforming the levy into a more flexible training levy in the Budget this week.

Total apprenticeship starts have fallen from 494,900 in 2016/17 to 322,500 in 2019/20, said the CIPD.

The number of apprenticeships going to under-19s has fallen from 122,800 in 2016/17 to 76,300 in 2019/20, said its report. The CIPD warned that without reform, the levy will have further damaging effects on investment in skills.

Its chief executive Peter Cheese said a more flexible levy would allow business owners to pursue other accredited training and skills development for staff.

He added: “On all key measures the apprenticeship levy has failed and is even acting to constrain firms’ investment in apprenticeships and skills more broadly.

“It appears to have achieved the opposite of its policy objectives. Without reform it will act as a handbrake on employer investment in skills, damaging firms’ ability to recover from the pandemic.”

The levy on larger firms was aimed at creating more apprenticeships.

The Department for Education (DfE) said employees are being offered a cash boost of up to £2,000 for each apprentice they hire in a bid to create more opportunities.

A spokesman said: “The levy is an important part of our reforms to apprenticeships which are vital for driving our economic recovery.”