Apprenticeships in small and medium-sized enterprises

The purpose of the debate is to discuss apprenticeships in small and medium enterprises (SMEs), particularly the effect the 2017 apprenticeship reforms had on SMEs.

A significant reform of apprenticeships was the introduction of the apprenticeship levy in April 2017. The levy is paid by all UK employers with a pay bill over £3million. This is managed through the Digital Apprenticeship Service (DAS) online account.

Since May 2017 each apprenticeship framework or standard is associated with a funding band, and the government will only pay a share of the costs below the upper limit of the funding band. In May 2017, the (then) Government also set a requirement that at least 20% of an apprentice’s paid hours must be spent on off-the-job training.

In the 12 months before the levy came into operation, 564,800 learners started an apprenticeship. This decreased to 364,000 starts in the 12 months after it was introduced. There has been a slight recovery in 2018/19 compared to 2017/18, but the fall in starts since April 2017 has not been reversed.

A report by Centre for Vocational Education Research found that from 2016/17 to 2018/19, the number of starts for apprenticeships at SMEs fell more significantly than apprenticeships at large enterprises

Please note, unless otherwise stated the statistics within this paper are for academic years (August 1st to July 31st).