“Counterproductive” government reforms to funding have led apprenticeship numbers in England to plummet by 36% for young people and by more than a quarter in Tees Valley, Liverpool City Region and the West Midlands, new analysis has found.

Learning and Work Institute (L&W), the independent policy and research organisation behind the research, has also found that overall apprenticeship numbers have fallen by one third, that only one in two apprentices completes their studies, and that many employers say they are unable to access the training they need.

The apprenticeship levy, introduced in 2017, was intended to increase the number of apprentices and get employers more involved in their design. But the Treasury is estimated to be raking in £700 million more through the levy than it is spending on apprenticeships. Many large firms have focused their investment on their more experienced employees, with L&W finding one in four apprentices at levy-paying firms is aged over 25 and studying at higher education level.

L&W is calling on the next government to broaden the current levy into a “flex and match” Skilly Levy that would widen the number of options available to employers and redirect focus to young people taking their first steps on the career ladder. Under these proposals, firms could spend a proportion of their levy payments on non-apprenticeship training – but only if they invest at least as much in apprenticeships for young people too.

The amount of flexibility would increase over time, starting at 15% of employer’s levy funds and rising to 50%. A firm paying £2 million of Skills Levy could in time spend up to £1 million on approved training outside apprenticeships, but only if they had spent £1 million on apprenticeships for young people.

This alternative training would be sourced from a list approved by the Government in consultation with social partners and local leaders in order to tailor to local priorities. This list would be reassessed each year based on national and local economic need and other Government plans, such as the drive to net zero.

L&W also calls for greater focus on apprenticeship completions as opposed to just starts, particularly given only one in two apprentices complete their studies. Meeting the Government’s target of a 67% completion rate would mean 20,000 more apprenticeship completions from the same number of starts.