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Gloucestershire Business News

CIPD: Apprenticeship levy has ‘failed’

The apprenticeship levy has failed on all key measures, according to the Chartered Institute of Personnel and Development (CIPD).

Employer investment in training has fallen since its introduction, according to the HR body - with few apprenticeship starts and fewer apprenticeships going to young people, as reported by the BBC.

A study by the CIPD found that total apprenticeship starts fell from 494,000 in 2016-17 to 322,500 in 2019-20.

The number of apprenticeships going to under 19s fell from 122,800 to 76,300 over the same period of time.

The CIPD believes that, without reform, the apprenticeship levy will have a damaging effect on investment in skills.

The apprenticeship levy takes 0.5 per cent of the salary bill from major employers in England, so that the money can be used to provide skills and improve skills.

Some business owners say the rules of the scheme, allocating a certain number of hours spent on-the-job versus in a classroom, don't suit their workforce and make it harder to implement.

The chief executive of the CIPD said that adding more flexibility would allow bosses to fund their employees through technical or vocational courses in further education colleges, which aren't currently covered by the scheme.

The chancellor is set to announce an extra £126m for traineeships in England in Wednesday's Budget.

The scheme will include a new "flexi-job" apprenticeship, which will allow apprentices to work with a number of different employers in the same sector.

Currently, businesses in England are given £2,000 for every new apprentice they take on under the age of 25, and £1,500 for over 25s.

Rishi Sunak is set to raise the cash incentives for employers who take on any apprentice to £3,000.

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