A growing shortage of funding from the £2.8 billion apprenticeship levy has been attributed to the shortfall in support for SMEs. The AELP found that, on average, apprenticeship providers are turning down approaches from 40 SMEs each.
The research also revealed that 29% of providers with a government contract to train apprentices for SMEs have reduced recruitment. According to the AELP 39% of these providers have stopped or significantly reduced recruitment.
AELP chief executive Mark Dawe told HR magazine: “What’s doubly frustrating about the restriction on the number of new apprenticeship opportunities available is that the government has just issued official data showing that nine out of 10 apprentices stay in sustained employment and many of them who progress end up earning very good wages.
"As Downing Street and the chancellor have issued a mandate to ministers to concentrate spending money on what actually works, what further evidence does the government need to invest more in apprenticeships?
“The fact that the levy is running short of funding shows how popular apprenticeships are and that the levy should be kept. But it’s totally unacceptable for both small businesses and young people that so many of them can’t start apprenticeships because of failures in how the levy funding system works, and this is why it needs reform."
One suggestion for reform is a restoration of the £1.5 billion apprenticeship budget that was available to SMEs before the levy was introduced in April 2017. The AELP has also proposed an increase in the levy.
Dawe added: “Brexit requires us to meet employers’ skills needs by training more home-grown talent, but many training providers have given up ‘selling’ apprenticeships to SMEs when the lack of funding means that there’s no point in doing so. In the meantime there’s a big government advertising campaign telling employers that support is still available.
“The prime minister promised in July that he would ‘properly fund’ apprenticeships and the education secretary has said that the programme’s funding would be a matter for the Spending Review. As the clock ticks thousands of young people are hearing about the success stories of their peers who have been on an apprenticeship and they can’t understand why the same opportunities aren’t available for them.”
