The prime minister has said the government is currently looking at how the apprenticeship levy is working for young people.

Theresa May was responding to Labour’s Alan Whitehead at Prime Minister’s Questions. The Southampton Test MP asked about what he called the “disastrous” rollout of the levy. He cited a provider in his Hampshire constituency who had seen a drop in new apprenticeship starts of 70 per cent since the levy was brought in.

Since the apprenticeship levy was introduced in April 2017, the number of apprenticeship starts has dropped every month year-on-year. The latest figures show starts are down two-thirds from the pre-levy peak.

Apprenticeship starts down by two-thirds

Dr Whitehead said: “That accords with other providers figures in my area and means that hundreds of young people will now not get the apprenticeships they need.

"What is the prime minister doing to get this disastrous levy-based apprenticeship rollout back on the road?”

Ms May said: “What we have seen since the apprenticeship levy was introduced is actually a change in the number of people doing apprenticeships, but actually an increase in the quality of apprenticeships that are being undertaken.

“The government is now looking at how that levy is operating to ensure we can do what I want to do which is ensure that every young person has the opportunity of pursuing the course – be it of education or training – that is right for them and is going to give them the best start in life.”

Calls for a flexible 'skills levy'

The Department for Education has introduced some flexibility around the use of the levy, including allowing large employers to transfer 10 per cent of their levy funds to multiple businesses.

The CBI has called for the levy to become a “more flexible skills levy” to support apprentices and retrain adults.

Meanwhile, the Association of Employment and Learning Providers said it would like the 10 per cent contribution small and medium-sized enterprises have to spend on training apprentices to be scrapped.