The number of young people starting apprenticeships has fallen to its lowest level in a decade despite government cash incentives to encourage more businesses to take up the scheme.
Apprenticeship starts fell by 18 per cent to 319,000 in the academic year 2019-20 compared with the prior year, figures from the Department for Education showed yesterday.
The steep decline reflects the hammering that the job market has taken from the coronavirus pandemic, with many employers having cancelled or postponed apprenticeships since March.
During lockdown the number of young workers beginning as apprentices was about half the number for the same period last year.
Between March 23, when the lockdown came into force, and July 31, there were 58,160 apprenticeship starts, compared with 107,750 for the same period in 2019. Young people aged between 16 and 18 were the worst affected, making up fewer than 10 per cent of new starts during this period, compared with 17 per cent a year before.
The slump in new apprenticeships comes despite the government’s efforts to put them at the forefront of the economic recovery.
In June, Boris Johnson promised an apprenticeship for every young person. This was followed by the introduction of a new payment of £2,000 to employers in England for each new apprentice they hired aged under 25.
Verity Davidge, director of central policy at Make UK, which represents engineering and manufacturing companies, said that the incentive was a “drop in the ocean” compared with the costs required for taking on an apprentice.
“Industry is willing and able to step up and mitigate a future skills crisis, but government must pull out all the stops to support it,” she said.
Ms Davidge said that only 45 per cent of manufacturers were planning to offer apprenticeships in the next 12 months, a figure that would normally be 75 per cent.
The government would need to take bolder action to get numbers back on track, she said. “This includes greater flexibility to use the apprenticeships levy on wider costs such as wages and capital expenditure and giving small businesses up-front support to mitigate the cash flow challenges associated with starting an apprenticeship.”
Since April 2017, apprenticeships have been funded through a levy that requires businesses with an annual wage bill of £3 million or more, which is roughly 2 per cent of all businesses in the UK, to pay 0.5 per cent of their payroll costs into an apprenticeship fund for training.
Since then, however, the number of apprentice roles has steadily declined each year from a peak of 521,000 in 2011-2012, when the scheme was funded by the taxpayer.