Bridging the Gap: next steps for the apprenticeship levy


New research from Learning and Work Institute shows that the assumptions on which the apprenticeship levy were based are flawed, and that as a result the levy is set to be over-spent.

While the number of apprenticeships starts has fallen by around 20% since these reforms, there has been a rapid increase in the use of more costly higher and degree level apprenticeships by levy-paying employers, which often go to older workers and existing employees, rather than to young people starting out in their career. The new apprenticeship standards have also been more expensive than anticipated.

The shift to more expensive apprenticeships could mean the apprenticeship budget is overspent by more than £1 billion. This could lead to a creeping rationing of funding for SMEs, with the potential loss of up to 75,000 apprenticeships.

We set out the choices for tackling the growing funding gap, including a balanced and costed proposal to close the gap, and to ensure that there is sufficient funding for SMEs and enough opportunities for young people.

Media coverage of the report