The Apprenticeship Levy needs urgent reforms according to the Federation of Master Builders (FMB).
The latest statistics released by the Department for Education show that the number of new construction apprenticeship starts for January 2019 has fallen to 950 compared with 1,216 the previous year.
In particular, the number of starts for Level 2 apprenticeships, that is equivalent to GCSE level, has dropped to 555 in January 2019 from 712 in January 2018.
Now, the Federation says that the scheme is exacerbating the construction skills shortage.
Brian Berry, Chief Executive of the FMB, said: “These latest statistics point to a serious failure of the Government’s Apprenticeship Levy.
“Their publication comes at a time when 64% of construction firms are already struggling to hire carpenters and joiners, and 61% are struggling to hire bricklayers.
“The Government needs to make the Apprenticeship Levy work for small construction firms by increasing the proportion of Apprenticeship Levy vouchers that are permitted to be passed down the supply chain from large to small companies from 25% to 100%.
“After all, small and medium-sized construction firms train two-thirds of all apprentices in our sector and more importantly, they offer training in the skills the industry actually needs – the on-site trades like plasterers and plumbers.”
He added: “Looking ahead, as part of its post-Brexit immigration proposals, Ministers want to close the door to Level 2 tradespeople by dubbing them ‘low skilled’ and preventing them from entering and working in the UK for more than 12 months at a time.
“It takes years to train quality tradespeople to become a Level 2 worker and there aren’t enough UK-born workers to go around as we are almost at full employment.
“The construction industry is facing a cliff-edge when it comes to skill shortages, and I’m concerned that we will not be able to continue growing and delivering on the Government’s housing and infrastructure targets.”