Make UK is calling on the Government to introduce a Skills Investment Pledge to halt the sharp decline in apprenticeship starts and tackle the growing number of young people not in education, employment or training.

Figures highlighted this week during National Apprenticeship Week 2026 show that apprenticeship starts in manufacturing and engineering have fallen by 40% since the introduction of the Apprenticeship Levy in 2017. At the same time, skills shortages remain one of the most significant barriers to growth and productivity, with around 50,000 live vacancies across the sector.

Despite record employer contributions through the Growth and Skills Levy, formerly the Apprenticeship Levy, and the Immigration Skills Charge, Make UK says more than £1 billion raised annually from businesses is not currently being used by Government to support employer investment in training. The organisation argues that this effectively acts as an additional tax on manufacturers at a time when they are struggling to fill critical roles.

The proposed Skills Investment Pledge would be a clear, public guarantee that every pound collected from the Growth and Skills Levy and Immigration Skills Charge is spent on developing the workforce the UK needs.

Make UK’s Industrial Strategy Skills Commission found that a lack of appropriate local training provision is a significant barrier preventing employers from taking on more apprentices. With over £1 billion in levy revenue not being deployed to fund training, the organisation believes ministers have the means to address the issue directly. Without intervention, manufacturers warn that valuable skills training risks being reduced even further.

While Make UK has welcomed Industrial Strategy commitments allowing Growth and Skills Levy funds to be spent on short courses, it says further action is required to reverse the 40% decline in engineering and manufacturing apprenticeship starts and address concerns that the current system makes it harder for employers to close skills gaps.

To ensure levy revenue is spent productively, Make UK is urging Government to increase the supply of apprenticeships and other high-value courses through direct incentives, particularly for smaller employers. It also wants to see greater flexibility in training criteria, with a primary focus on Industrial Strategy sectors, and a greater degree of trust placed in businesses to determine how best to address their own skills shortages.

For manufacturers, the impact would be immediate. Ringfencing levy funds for skills could secure vital resources to expand apprenticeships, Skills Bootcamps and Higher Technical Qualifications, improve funding bands in high-cost technical disciplines such as engineering, and rebuild capacity within further education providers.

Make UK estimates that ringfencing levy funds would reallocate more than £1 billion per year, equivalent to 0.1% of GDP, towards workforce development and training by 2029–30. This would represent a 69% increase on current Government funding for apprenticeships and could deliver around 234,000 additional starts each year, helping Government address the number of young people classified as NEET.

Using more conservative assumptions than the Government’s own estimates, Make UK calculates that the long-term economic impact of ringfencing the Growth and Skills Levy and Immigration Skills Charge would still generate an annual boost worth between £4.4 billion and £5.9 billion, driven by higher wages and employment resulting from a more skilled workforce.

Rt Hon. Robert Halfon, Executive Director, Make UK, said:

“Manufacturing and engineering apprenticeships are in steep decline, yet billions from the Growth and Skills Levy and Immigration Skills Charge are not being used by the Government where they’re needed most – risking valuable training being cut back. Ringfencing these funds through a Skills Investment Pledge could instead unlock hundreds of thousands of new apprenticeships, plug skills gaps, and deliver at the very least a £4.4 billion boost to the economy. The time to act is now - our young people and our sector cannot wait.”