Saving apprenticeships: A policy primer

• Apprenticeships are critical for filling skill shortages in key industries like construction and IT, addressing youth unemployment, and driving economic growth. Public support is strong, with 76% of people prioritizing greater apprenticeship opportunities over university expansion​.
• The ineffectiveness of the current system:
  • The number of apprenticeships for young people has significantly fallen, with those under 19 making up only 23% of starts in 2023/24 compared to 41% in 2008. Meanwhile, 49% of apprenticeships are now taken by individuals aged 25 and older​.
  • The apprenticeship levy is primarily utilized by large firms. In 2022/23, 69% of total apprenticeship spending went to levy-paying employers, with many using funds for existing employees’ upskilling rather than new hires.
  • Only 20% of apprenticeships address skill shortage areas​.
  • Small and medium enterprises (SMEs), which employ 61% of the UK workforce, struggle to access apprenticeships due to limited funding and administrative barriers. Non-levy-paying SMEs account for under 33% of apprenticeship starts, yet over half of these apprentices are under 19​.
  • Apprenticeship opportunities have disproportionately declined in poorer regions. Large firms, concentrated in economically successful areas, dominate levy usage, leaving disadvantaged regions with fewer training opportunities.

RECOMMENDATIONS

• Ringfence apprenticeship funding for under 21s
• A universal levy system that includes all employers as contributors
• A policy framework to fund workplace upskilling separately from apprenticeship programs
• Devolving apprenticeship funding and oversight to local authorities, particularly mayoralties