The government’s apprenticeship levy, aimed at improving productivity and meet skills needs of employers, has “much more to do” to meet its ambition of creating 3 million apprenticeships by 2020, the National Audit Office has warned.
Spending on the apprenticeships programme has increased from £1.2bn in 2010-11 to £1.6bn in 2017-18, but the extra funding has not been reflected in the take-up of apprenticeships.
The number of apprenticeships started in 2017-18 was 375,000, 26% lower than the 509,400 starts in 2015-16, the NAO said.
In 2017, the Department for Education introduced changes including a 0.5% apprenticeship levy for employers with a pay bill of more than £3m. Levy-paying employers can use this money plus a 10% government top-up, to pay for apprenticeship training and assessment.
Despite making these changes, levy-paying employers used only 9% of the funds available to them to support new apprenticeships - £170m out of an available £2.2bn.
Amyas Morse, head of the NAO, said: “Despite making changes to the apprenticeships programme, the department has not enticed employers to use available funds or encouraged enough potential recruits to start an apprenticeship.
“It has much more to do to meet is ambitions. If the department is serious about boosting the country’s productivity, it needs to set out clearly whether its efforts are on track to meet that aim.”
The report, out today, said that the DfE has not “set out clearly how it measures whether the programme is boosting economic productivity” and therefore has “a long way to go before it can demonstrate that resources are being used to best effect”.
Mark Hawthorne, the Local Government Association’s skills spokesman, said: “With a 26% fall in apprenticeship starts between 2015-16 and 2017-18 and many employers still struggling to spend their funds nearly two years after the introduction of the apprenticeship levy, further reform to enable greater local flexibility is desperately needed.”
Gerard Dominguez-Reig, senior researcher for post-16 skills at the Education Policy Institute think-tank, urged for apprenticeships to start at earlier ages.
“Previous EPI research has called for robust progression pathways to higher levels of apprenticeships to entice learners, and has suggested that both employers and learners would benefit from younger-age longer apprenticeships to smooth school-to-work transition,” he said.
He said the department should consider these proposals to plug the skills gap in England.
A DfE spokesperson said: “The apprenticeship programme gives employers the opportunity to provide new and existing staff with a range of opportunities to gain skills in the workplace and makes sure we have long term investment in apprenticeships.
“Apprenticeships enable people to get a great job and career, and give employers the skilled workforce they need.”
