A group of leading businesses in the North are calling for action after a major drop in the number of young people starting apprenticeships in the region.
The Northern Coalition on Skills - which is led by the Northern Powerhouse Partnership and includes companies like Sage, Arup and the Co-op - made the call after the North East saw a 27% drop in the number of apprenticeship starts over the last two years.
The region’s figure was the highest drop in the 海角视频, though other areas of the North also saw a significant reduction in apprenticeship numbers.
Read more : college offers space to businesses
The fall follows a period of turmoil related to the Government’s apprenticeship levy which was made worse by many companies suspending training opportunities during the pandemic.
Nationally, the number of people starting an apprenticeship has fallen by 58,000 over the past two years, with 23,000 of them (22%) in the North.
By comparison, the number in London fell by just 2,400, a drop of 8%.
Businesses in the North are now calling for reforms to the apprenticeship system, saying that a growing skills gap with other parts of the country will hold back the region’s economy.
Most Read
Co-op CEO Steve Murrells said: “If we genuinely want to build back Britain different and better, then this must be a decade of collective action when it comes to apprenticeships, that benefits all communities right across the country.
“These apprenticeship figures suggest a staggering North-South divide when it comes to the futures of our young people and, in turn, the skills that will avoid putting our wellbeing and economy at risk in the North. Reform of the apprenticeship levy is a vital building block to ensure this happens.”
Paul Struthers, 海角视频 and Ireland managing director for Newcastle software firm Sage said: “As the skills gap widens and businesses attempt to recover from the damaging effects of the pandemic, there is a golden opportunity for the business community to work with local government and growth hubs to unlock our region’s potential.
“We look forward to playing an active role as part of the Northern Coalition on Skills. Creating more apprenticeships will not only boost productivity and growth of the economy but will help local people gain the skills needed for the jobs of the future, while potentially empowering a new wave of entrepreneurs.”
The apprenticeship levy is paid by all companies with an annual salary bill of over £3m, with that money plus a contribution from the Government available to pay for training and development.
But many companies are not using all of their levy money, with recent figures suggesting that businesses lost out on more than £300m last year as they failed to spend their full allocation due to rules about how the money can be used.
A number of business groups have called for rules on the apprenticeship levy to be changed to allow funding to be transferred to companies in supply chains to help smaller firms train more staff.
Don’t miss
Sign up for your daily BusinessLive North East newsletter
You can get all the day's business news from the North East sent to your email inbox each morning.
By signing up here, we will deliver the headlines from companies in Tyne and Wear, Northumberland, County Durham and Teesside straight to your email inbox every morning.
Our specialist team of business writers will bring you stories from a range of sectors, reporting on companies large and small.
Sarah Mulholland, head of policy at the Northern Powerhouse Partnership, said: “A skilled, well-paid workforce is the backbone of a productive economy.
“It’s time to begin opening up the industries of the future – electric vehicles, green energy, machine learning – to the next generation of workers through investment in apprenticeships and other training opportunities for our young people.
“The North has the history, the expertise and the tools to lead a fourth industrial revolution. We now need Government and businesses to work together to level up opportunity across the country and close the North-South divide in skills for good.”
The North East saw the number of people starting an apprenticeship fall from 18,500 in 2018/9 to 13,500 in 2020/1, a reduction of 27%. There was a 20% fall in the North West and a 23% reduction in Yorkshire and Humber, but a much smaller reduction in London and the South East.
A Department for Education spokesperson said: “Apprenticeships are playing a vital part in providing the skilled talent pipeline businesses need as we recover from the pandemic. To help create more apprenticeship opportunities, we’re offering businesses £3,000 for each new apprentice they take on until the end of September.
“The levy supports employers of all sizes to invest in high-quality apprenticeship training. In 2020-21, funding available for investment in apprenticeships in England will remain around £2.5bn - double that spent in 2010-11 in cash terms.
“We know not all levy paying employers will use or want to use all of the funds available to them. Any unspent funds in their accounts do not go to waste, but are used to fund new apprenticeships in employers that do not pay the levy, as well as existing apprentices that started in previous years.”