Fact Service March 2021

Issue 9

Budget offers little change on training

Hopes of a government rethink on the withdrawal of the Union Learning Fund were dashed by the budget announcement. Instead there were only promises of a doubling of the incentive payment to businesses to take on new apprentices.

That news followed the release of a damning report by the CIPD which found that the apprenticeship levy, which is now in its fourth year, has failed “on every measure”.

According to the body, which is the chartered institute for HR, since the levy’s inception employer investment in training has declined, overall apprenticeship starts have fallen and far fewer apprenticeships have gone to young people.

Analysis of the levy found that:

• apprenticeship starts fell from 494,900 to 322,500;

• employer investment in training has declined, with employer-funded off-the-job training in England falling by £2.3bn between 2017 and 2019; and

• in 2016, 11% of small businesses (fewer than 50 employees) had apprentices in their organisations, but by 2019 this had dropped to just 9%.

The apprenticeship levy currently takes 0.5% of the salary bill, above a £3 million threshold, of employers who spend more than £3 million per year in wages. The government then adds 10% for the employer to use on its own training arrangements for apprentices.