- Apprenticeship starts in
manufacturing and engineering have decreased by 40% since the
introduction of the Apprenticeship Levy in 2017
- More than £1 billion of revenue
raised from businesses for skills is not currently used by the
Government to support employer investment in training
- Ringfencing the Growth and Skills
Levy and Immigration Skills Charge would provide an annual boost
to the economy worth between £4.4 and £5.9bn
- 234,000 starts could be providing
helping Government address the number of young people not in
education, employment or training (NEET)
As National Apprenticeship Week 2026 kicks off, Make UK is
calling on the Government to commit to a Skills Investment Pledge
to address the decline in apprenticeship starts and rise in those
not in education, employment or training (NEET)
The pledge would be a clear, public guarantee that every pound
collected from the Skills and Growth Levy (formerly
Apprenticeship Levy) and the Immigration Skills Charge (ISC) will
be spent on developing the workforce the UK needs.
Skills shortages remain one of the biggest barriers to growth and
productivity for manufacturers, with around 50,000 live vacancies
in the sector.
Despite record employer contributions through the Growth and
Skills (G&S) Levy and the Immigration Skills Charge (ISC),
billions are collected each year that are not reinvested in the
skills system – effectively hitting employers with an extra tax.
Make UK's Industrial Strategy Skills Commission found that a lack
of the right local training provision was a significant barrier
to employers taking on more apprentices. With a large chunk of
the money – estimated to be over £1 billion – paid by businesses
via the Growth and Skills Levy and Immigration Skills Charge not
being used by the Government to fund training, it is within
ministers' gift to address this challenge. Without action,
manufacturers fear that valuable skills training will be reduced
even further.
Industrial Strategy commitments to allow G&S Levy funds to be
spent on short courses are welcome. However, action is needed to
address the 40% decline in engineering and manufacturing
apprenticeship starts since 2017 and reported perceptions that
the G&S Levy is making it harder for manufacturers to plug
skills gaps.
Make UK is calling on the Government to commit to a Skills
Investment Pledge – a clear, public guarantee that every pound
collected will be spent on developing the workforce the UK needs.
To ensure that the revenue from skills levies is spent
productively, the Government should:
- Increase the supply of
apprenticeships and other high-value courses through direct
incentives, particularly targeted at smaller employers;
- Identify ways to loosen the
training criteria with a primary focus on its Industrial Strategy
sectors, trusting businesses in these sectors to know how to
address the skills shortages they face.
For manufacturers, the benefits would be immediate, securing
vital resources to expand apprenticeships, Skills Bootcamps and
Higher Technical Qualifications, and improving funding bands in
high-cost technical disciplines such as engineering, and rebuild
capacity in further-education providers.
Ringfencing levy funds for skills would reallocate over £1bn per
year (0.1% of GDP) towards workforce development and training by
2029-30. This is a 69% increase on current government funding for
apprenticeships, equivalent to around 234,000 additional starts a
year.
Applying more conservative assumptions than the Government's own
estimates would still produce an annual boost to the economy
worth between £4.4 and £5.9bn in the long run, driven by higher
wages and employment from a more skilled workforce.
Rt Hon. , Executive Director, Make UK
said:
“Manufacturing and engineering apprenticeships are in steep
decline, yet billions from the Growth and Skills Levy and
Immigration Skills Charge are not being used by the Government
where they're needed most – risking valuable training being cut
back. Ringfencing these funds through a Skills Investment Pledge
could instead unlock hundreds of thousands of new
apprenticeships, plug skills gaps, and deliver at the very least
a £4.4 billion boost to the economy. The time to act is now - our
young people and our sector cannot wait.”
Notes to Editors
- Make UK's Apprenticeships
and Skills Asks | Make UK
