Sunak should act on the failing apprenticeship levy as youth unemployment crisis deepens

The government shouldn’t apologise for trying to get businesses to invest more in training young workers but the levy has coincided with a sharp decline in apprenticeship starts, writes James Moore

New apprenticeships have fallen since the introduction of the levy (Getty)

If the chancellor is serious about raising business taxes, which has become one of the more contentious pre-Budget talking points, there is one way he could both throw them a bone and maybe do some good. It would be to signal plans to reform the apprenticeship levy. 

The intentions behind the policy – which imposes a payroll tax of 0.5 per cent on businesses with wage bills of £3m or more – were good. 

The money raised goes into a “digital fund” which payers can redeem against the cost of training apprentices on the basis of use it or lose it. It was later tweaked to allow them to share their levy funds with other companies. Those in their supply chains, for example.