New research has shown that since the Apprenticeship Levy was launched in April 2017, the total number of starts across all industry sectors has dropped by 61%.
This figure also includes a fall of 15% in the automotive industry alone. Such a drop has, according to the Institute of the Motor Industry (IMI), caused confusion amongst employers about the new processes, along with reluctance by smaller businesses to take on what they see as an increased administrative burden in the move from older apprenticeship frameworks to the newer models that the levy introduces.
When introduced, the Apprenticeship Levy was set at a rate of 0.5% of an employer’s annual payroll. However, only those with a payroll over £3 million would have to make the contribution. Those who do not pay will instead contribute 10% of the cost of their apprentice’s training and assessment, with the government covering the remaining 90%. However, for those companies employing less than 50 people, such as many independent garages, 16-18 –year-old apprentices will be fully government funded.
With government cuts having removed independent careers advice in schools in England, the IMI found over half of young people aren’t being given the tools to explore new opportunities outside A Levels and university. But the industry body is committed to spreading the message of apprenticeships and the vast range of careers available in automotive by engaging with young people in schools to breakdown any stigma associated with vocational learning and to help ensure that young people are given balanced advice about their options.
Speaking about the issues, IMI chief executive Steve Nash says: “The automotive sector has seen a 15% drop in apprenticeship starts, which is relatively small compared to the overall 61% and perhaps reflects the fact that apprenticeships are a long-established entry into automotive, with many excellent employers offering first class schemes. But this is still a serious issue in a sector hungry for new talent. We can only expect this to improve if government take steps to significantly improve the quality and availability of careers advice in schools.
“The IMI surveyed parents and young people to find that over 80% of parents said they would choose university over an apprenticeship for their children. So it’s clear that reforming apprenticeships alone is not enough. Far more needs to be done to educate both children and their parents on the alternatives to University if the government is to reach its aim of gaining an even balance between those opting for the traditional higher education route and those choosing vocational learning.”