Responding to last week news that there was a drop in apprenticeship starts, Federation of Small Businesses (FSB) National Chairman, Mike Cherry, said: “Today’s 28% year on year drop is yet another clear signal that the levy system isn’t working to its full potential.

“Big businesses are still struggling to come to terms with the levy system and are failing to pass on their unspent levy to small businesses. This support is vital for smaller firms that are looking to offer apprenticeship opportunities, but may not be able do due to higher costs brought on by the introduction of the 10 per cent contribution for training an apprentice.

“The Government must now come clean about its ambitious apprenticeship target of three million starts by 2020 and admit that it is increasingly looking out of sight. We will now need to see about 73,000 a month if we are to hit this target.

“Lessons must be learnt from the continuing drop in starts and more must be done to arrest the slump which is damaging productivity and compounding already chronic skills gaps.

“The Government has to take steps now to make it easier and more cost-effective for small firms to invest in apprentices. This includes extending the small businesses incentive, currently only available to firms with fewer than 50 employees, to all non-levy payers which recruit a 16-18 year old apprentice.”