The CIPD is urging the government to announce it will reform the apprenticeship levy in its upcoming budget, adding that a “more flexible” levy could help boost employer investment in workforce skills and in turn help the economy recover.
According to the latest CIPD survey of 2,000 organisations, nearly half of large employers said that reforming the levy to a more flexible training levy would help them improve workplace productivity and business performance to either a great (23%) or a moderate (23%) extent.
Only 13% of large firms employing 250 or more staff said that reforming the levy in this way would have “no impact on productivity or performance”.
The analysis also showed that total apprenticeship starts have fallen from 494,900 in 2016/17 to 322,500 in 2019/20. Additionally, the number of apprenticeships going to under 19s has fallen from 122,800 in 2016/17 to 76,300 in 2019/20.
The current funding arrangements are also dropping. In 2016, CIPD recorded that 11% of small businesses (less than 50 employees) had apprentices in their organisations, but by 2019 this had fallen to just 9%.
Peter Cheese, chief executive CIPD, said: “On all key measures the apprenticeship levy has failed and is even acting to constrain firms’ investment in apprenticeships and skills more broadly.
“Levy flexibility would also help employers fund their employees through training in further education colleges as many technical and vocational courses are not apprenticeships. This key change would provide a big boost to meeting the ambition of the government Skills for Jobs white paper and boost employer engagement with their local colleges.”