A generation of young workers risk being left untrained unless the apprenticeship levy is reformed by the end of the year.

The Confederation for British Industry (CBI) claimed the risk comes from an increasing use of automation and AI in the workplace.

Businesses across all sectors with an annual wage bill above £3 million pay 0.5% a year to fund apprenticeship training.

But the number of apprenticeship starts in England has fallen since the apprenticeship levy was introduced in April 2017.

Many businesses have little idea of how the levy works or what to do with the funds that are sitting unspent in their levy accounts.

Matthew Fell, chief UK policy director at the CBI, said:

"Businesses are confused and crying out for clarity on how their levy funds are being used and are struggling to utilise their levy funds for training.

"With apprenticeship starts significantly down, it's clear the levy is not working as intended - especially for smaller firms.

"Without urgent action, the levy risks becoming a roadblock to the Government's wider and welcome efforts to modernise the skills system."

In July 2019, chancellor Sajid Javid revealed his intention "to broaden the apprenticeship levy into a wider skills levy" ahead of his first Budget.

The CBI suggested that the answer may be to evolve the apprenticeship levy into a flexible skills levy.

Talk to us about the apprenticeship levy.

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