Just 17% of the 2,026 senior HR managers surveyed by the CIPD between February and March 2022 support a continuation of the Apprenticeship Levy system in its current form, reports the Financial Times, while 51% back reforms to allow the money to fund a range of workplace training.

The Apprenticeship Levy is now five years old, having been introduced in April 2017 by the then chancellor George Osborne, who set a target of creating 3mn apprenticeships by requiring employers with annual wage bills over £3mn to set aside an equivalent of 0.5% of their salary cost to fund in-work training. However, in the 2020-21 academic year, just 713,000 apprenticeships were undertaken, the lowest annual figure since 2010. Last month, the current chancellor, Rishi Sunak, promised to review the levy system, with details to follow in his autumn Budget.

Says Lizzie Crowley, senior skills adviser at the CIPD:

“At a time of acute skill shortages and a decline in skills investment, when public funding is tight, we cannot allow this situation to continue. Reforming the existing levy and turning it into a broader and more flexible training levy would allow employers to develop existing staff through other forms of accredited and cost-effective training, focused on tackling technical skills shortages in the economy.”

When taking on apprentices, employers must:

• Give the apprentice a contract of employment that is at least long enough to allow them to complete their apprenticeship successfully.
• Pay the cost of the apprentice’s wages, which should be at least the national minimum wage consistent with the law for the time they are in work and in off-the-job training.
• Give the apprentice a job role (or roles) that enables them to gain the knowledge, skills and behaviours they need to achieve their apprenticeship.
• Allow the apprentice to combine learning in the workplace with formal off-the-job training, which usually takes place outside the normal working environment.

Martin McTague, national chair of the Federation of Small Businesses, acknowledged that in-work training brought “fresh perspectives” into a business but added that it was “disheartening” to see a drop off in starts among young people.

A government spokesperson said:

“All taxes are under constant review and we will continue to engage with businesses on the levy. We are committed to protecting the quality of apprenticeship training and improving the system to respond to the legitimate concerns raised by employers.”