The Department for Education has said that the number of people starting apprenticeships has dropped by 31% in the last 12 months.

In the academic year between August 2017 and May 2018, there were 315,900 apprenticeship starts, compared to 457,200 the same time the year before.

When questioned about the decline in apprenticeships, business groups including the British Chambers of Commerce (BCC) and the Institute of Directors (IoD) argue that the apprenticeship levy has created barriers for employers who hire these types of workers.

What’s the difference in cost to me?

Employers with an annual pay bill of over £3 million are required to pay the apprenticeship levy, and receive an allowance of £15,000 to offset against it.

Smaller businesses that do not pay the levy are required to fund 10% of the cost of training an apprentice, with the Government covering the remaining 90% (up to a funding band maximum).

Jane Gratton, head of business skills at the BCC said this “has significantly increased the cost of recruiting and training apprentices” for smaller firms, on top of other employment costs.

Edwin Morgan, director of policy at the IoD, commented:

“Firms are not against the apprenticeship levy in principle. The Government has been talking to businesses about where the obstacles are in the system, but it’s now time for action to get the system back on track. When skills shortages are one of the biggest issues facing the economy, there is no time to delay.”

Is it worth taking on an apprentice?

A study published earlier this year revealed that small firms are becoming increasingly positive about the value that apprenticeships can bring to their workforce.

97% of those questioned said the decision to hire an apprentice had proved to be good value for money. An impressive 90% said the apprentices they’ve hired have helped to boost productivity and 63% said they are more suited to the skills their business needs compared to other job candidates.

To find out more about apprenticeships and whether or not they’re right for your business, head over to our news section.

 

Should I speak to an HR company?

If you would like to speak to an HR company to find out more about apprenticeships, please feel free to get in touch with PKB and we will be more than happy to pass on some personal recommendations. Our accounts and business development manager, Andy Penfold can also help you to understand more about whether or not apprenticeships are right for your business.

Alternatively, if you’re looking for accountants in Berkshire to help with any other aspect of your business or finances, a member of the team will be able to assist.

 

To read news and blogs from Andy Penfold, click here >>

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