The apprenticeship levy, introduced by the government to encourage companies to take on apprentices, has been called “disastrous” and needs a complete overhaul, according to the chief of a major UK business group.

Chair of Britain’s leading manufacturing body, the EEF, Dame Judith Hackitt, addressed business leaders, including Business Secretary Greg Clark, at the EEF’s annual dinner this week.

She said that the levy is “complex” and claimed that a lot of companies have postponed or even stopped their apprentice schemes as a result of the levy.


“A win-win has become a lose-lose,” she said, according to a BBC report. “Some employers are near breaking point and government must now listen to what EEF has long said and rethink the entire system from top to bottom.”

Dame Judith also wants clarity on any Brexit transition deal and for the government to avoid new trade barriers or complex customs agreements.

“We are not asking for a seat at the negotiating table but we must have a place in the wings providing up to the minute input as negotiations proceed,” she said.

The government introduced the apprenticeship levy in April and sees companies with a pay bill of £3m give 0.5% of this bill to the levy. Employers can claim the money back if they use it to train employees.

The number of apprenticeship starts has dropped from nearly 156,000 in the first quarter of the 2016-17 academic year to 114,000 in the same period this academic year.