Hundreds of millions of pounds are being spent on “fake apprenticeships” that are just relabelled degrees or training courses, according to a report by a thinktank which says employers are abusing the current system.

Since 2017 large companies have been forced to set aside the equivalent of 0.5% of their payroll to fund apprenticeships. But according to Tom Richmond, the author of a report for the EDSK thinktank, many are instead using the funds for existing professional development courses.

“Despite being set up with the best intentions, the apprenticeship levy is now descending into farce,” Richmond said.

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“Instead of supporting the government’s efforts to improve technical education for young people, the evidence shows that some employers and universities are abusing the levy by rebadging existing training courses and degrees as apprenticeships for their own financial gain.”

The report found the most common use of apprenticeship funding was for “team leader/supervisor” courses for experienced staff, accounting for almost one in 10 apprenticeships.

Since the levy was introduced, the proportion of young people starting apprenticeships has fallen – especially in entry-level apprenticeships – while there has been a rise in the number who were already working for their company before being designated as apprentices.

“In other words, the bulk of the levy is being spent on existing adult workers instead of supporting young people into the workplace,” the report said.

EDSK also accuses several universities, including Durham and Imperial College, of creating “academic professional apprenticeships” to fund training of their own highly-qualified academic staff.

“The fact that you typically need a PhD to be accepted onto this levy-funded training course confirms that it bears no relation whatsoever to any genuine apprenticeship,” the report states.

But Mark Dawe, chief executive of the Association of Employment and Learning Providers, representing the bulk of training providers in England, disputed Richmond’s assertions.

“For a post-Brexit economy with migratory controls, we have to say again that apprenticeships should be available to employers of all sizes to access the full range of apprenticeship programmes,” Dawe said.

“We have to repeat ourselves because whatever guise Tom Richmond has taken since leaving government, he sounds like a scratched record on the subject.”

Dawe also took issue with the report’s claim that employers were using the levy to fund entry-level training for “various low-skill and generic jobs” such as retail and hospitality that did not meet established definitions of apprenticeships.

“The caricatures used bear no resemblance to the reality of what is actually being learnt by the apprentice,” Dawe said.

“These apprenticeships are essential for sectors such as construction and social care which will help galvanise the left-behind regions.”

A Department for Education spokesperson said: “Our reforms mean apprenticeships are better quality, lasting for a minimum of 12 months with at least 20% off-the-job training. In 2017 we introduced legislation so training cannot be called an apprenticeship unless it meets those basic criteria and the minimum quality requirements set by us.

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“The Institute for Apprenticeships and Technical Education approves all apprenticeship standards to ensure they meet high-quality requirements.”

A spokesperson for the institute added: “We work closely with thousands of employers as well as many other stakeholders to make high quality apprenticeship standards available across the whole economy.

“This has led to a broader variety of apprenticeships up to degree-level being available to employers, a far better reflection of the nation’s skills requirements.”

The DfE noted that 393,400 apprenticeships were started in 2018-19, compared with 375,800 in 2017-18, an increase of nearly 5%. But the total is still well below the 564,800 apprenticeships started before the levy came into force.

A recent survey by the accountancy firm Grant Thornton found that 45% of companies with an apprenticeship levy had not used any of the funds they had set aside in the two years since the scheme was launched.

Smaller employers can arrange apprenticeships with approved providers, paid out of funds generated by the levy, although the CBI has reported that a shortfall means smaller companies are being excluded.