New apprenticeships in Peterborough at lowest level since reform

Department for Education data shows people living in Peterborough started 1,140 apprenticeships in the 2019-20 academic year.

That was down by a fifth (20%) from 1,420 in the previous year (greater than the national average), and a one third (34%) fall from the 1,740 in 2016-17, when the levy came into effect.

HR body the Chartered Institute of Personnel and Development says a national drop in new starts shows the apprenticeship levy introduced in 2017 has “failed on all key measures”.

Across England, 322,500 apprenticeships started last year – dropping by 18 per cent from 393,400 in 2018-19, and more than a third from 494,900 in 2016-17.

The DfE cautioned that the latest figures – which cover the academic year from August to July – were impacted by the coronavirus pandemic.

But it said the number of apprenticeships started across England in the academic year up to March 22 last year was still seven per cent lower compared to the same period in 2018-19.

Critics say the apprenticeship levy - a tax larger businesses pay towards a national fund for the training of apprentices - has caused confusion for employers.

When introduced, the Government said it would give employers greater control and generate more money for training.

But in a report, the CIPD found overall employer investment has declined since the levy’s introduction, while funding arrangements for smaller firms are not working.

Separate figures from the DfE show the number of apprenticeship starts by business size, covering 93 per cent of placements nationally.

In Peterborough, small businesses – those with fewer than 50 employees – took on 16 per cent of apprenticeship placements in 2019-20, compared with 43 per cent in 2016-17.

Across England that proportion also fell from 37 per cent in 2016-17 to 27 per cent in 2019-20.

Peter Cheese, chief executive of the 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.

“It appears to have achieved the opposite of its policy objectives.”

Chancellor Rishi Sunak announced changes to apprenticeships as part of his Budget, including more cash for businesses for each apprenticeship started.

A new “flexi-job” apprenticeship will also become available for trainees to work with a number of different employers in one sector.

Mr Cheese welcomed the changes but called them “underwhelming”.

Mike Cherry, chairman of The Federation of Small Businesses, which has also been critical of the levy, welcomed the Chancellor’s proposals.

He added: “It’s important to increase employment incentives as the current level of support is not leading to enough starts.”

Apprenticeships aim to provide on-the-job training to get people into employment after education.

The DfE said it will make improvements to the apprenticeship levy in response to employers’ feedback.

Apprenticeships and skills minister, Gillian Keegan, said: “As we build back better, apprenticeships will play a vital role in helping businesses of all sizes access the skills they need to thrive and making sure people of all ages and backgrounds have the chance to get ahead.”