Government should make an exception to allow manufacturing firms to spend left over Apprenticeship Levy funding on paying the wages of new recruits, Make UK has urged as the country marks National Apprenticeship Week.
The group says almost £2 billion of levy funding – intended to fund apprentice training – went unspent in the sector last year as companies struggled to cover the cost of making hires.
“Currently an average four year engineering apprenticeship can cost a business up to £120,000 to deliver yet just £27,000 of that cost is currently claimable from levy funds,” said Make UK’s senior policy manager Jamie Cater. “The system as it currently stands often leaves companies struggling to pay an apprentice, leaving their levy contribution unspent.”
The group argues that adopting a targeted, sector-specific approach to enable excess levy funds to be spent on wages for new apprentices would help manufacturers boost the number of recruits into the sector and fill skills gaps.
“With a bit of flex in the levy spending arrangements, manufacturers could do even more in terms of building the workforce of the future,” said Mr Cater. “Manufacturers are telling us they are keen to take on more apprentices to fill the skills gap which would in turn allow businesses to grow and help level up regions.”
According to Make UK, 47% of manufacturers managed to recruit an engineering or manufacturing apprentice last year but only 45% say they plan to do so in this coming year under the current arrangements.
The theme of this year’s National Apprenticeship Week is for the second year running ‘Build the Future’. The annual campaign aims to promote the benefits that apprenticeships can offer to both learners and employers, with over 1200 events taking place across the week.
British Chambers of Commerce and the Institute for Apprenticeships & Technical Education have partnered in support of the campaign and are encouraging more smaller employers to take on apprentices.
BCC president and chair of the Institute Ruby McGregor-Smith commented: “Businesses of all sizes emerging from the pandemic need a skilled workforce and don’t want to lose out on the next generation.
“Government is more invested than ever before in apprenticeships and surveys also show that most young people would now consider an apprenticeship. It’s time to join the dots through talking up the fantastic opportunities that will be amplified through the levelling up agenda. There has never been a better time to get behind apprenticeships.”
To find out more about National Apprenticeship Week and view events listings, visit www.apprenticeships.gov.uk/influencers/naw-2022