05 March 2021

Make UK calls for shake up of levy as pandemic takes toll on apprenticeship starts

Leeds Manufacturing Festival

Figures published by the Department for Education show there were 91,100 apprenticeship starts recorded for the three month period from August to October 2020, compared to 125,800 reported for the same period pre-Covid-19 in 2019/20 – a 28% fall.

But it’s an improved picture when contrasted with the previous quarter of the pandemic, when just 43,600 starts were achieved between May and July 2020, a drop of 42% compared to 75,500 starts for the same period in 2019.

For the data recorded in the first quarter of 2020/21, those aged under 19 accounted for the biggest fall, with starts for this age group dropping 42 per cent from 40,700 last year to 23,800. 

Starts for level 2 apprenticeships also dropped by 43% while the only increase in starts in quarter one of 2020/21 was seen among higher apprenticeships, which rose by 1%. 

Today’s statistics also provide an update for take-up of the chancellor’s apprenticeship incentive scheme, which hands employers a “bonus” of up to £2,000 to take on a new apprentice between 1 August 2020 and 31 March 2021. 

The Chancellor has responded, increasing incentive payments for employers to recruit apprentices to £3,000. Ok. Industry body Make UK has described the measure as ‘a step in the right direction’.

In its Budget analysis, the manufacturing employers’ organisation welcomed measures including the ‘super deduction’ to encourage investment, which allows companies to cut their tax bill by up to 25p for every £1 they invest in capital equipment and machinery.

But it called for a more wide-ranging shake up of the apprenticeship levy.

Commenting on behalf of Make UK, executive director Ben Fletcher said: “Today’s announcement is a step in the right direction to offering the level of support manufacturers need to recruit and retain apprentices.

“However, these are still baby steps and, with apprenticeship starts showing no signs of bouncing back, employers want to see bolder measures to support apprenticeships.

“This includes immediately easing the transferring of funds to SMEs and companies in their supply chains, and allowing the use of Levy funds for wider costs including capital expenditure sooner than later.”


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