The British Chambers of Commerce (BCC) has urged the UK Government to go further in overhauling apprenticeships to make the system fit for the 21st Century, in a new report issued during National Apprenticeships Week.

According to the BCC, the current framework is too rigid, lacks clarity, overlooks higher-level skills and is not meeting employers' needs.

Its recommendations include reshaping the proposed Growth and Skills Levy so it can fund short, modular training; recognising spending on skills as investment and delaying the move to a lower National Living Wage threshold; drawing on intelligence from Local Skills Improvement Plans to future‑proof policy; and ringfencing funds from the Levy and the Immigration Skills Charge for training.

The report draws extensively on analysis by the BCC's Insights Unit. While 67% of firms reported skills shortages, more than half (52%) said existing training options are not closing the gap.

It also finds that over a third of businesses (37%) believe lowering the National Living Wage threshold from 21 to 18 would make them less likely to recruit younger people.

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And the BCC says government changes to apprenticeships are still not delivering the flexibility employers want: 61% of firms reported the reforms would not change their hiring plans, while a further 19% said they would be less likely to take on an apprentice.

Kate Shoesmith, Director of Policy and Insights at the BCC, said: "As we celebrate National Apprenticeships Week there can be no doubt how truly transformational this training system is. Becoming an apprentice provides a direct route for young people into work, to earn and learn, while setting out a clear pathway for their future development.

"For established employees they offer the opportunity to upskill, while remaining productive in their current role, a key reason that they remain attractive to employers.

"But it has been clear for a while that they system has many flaws. Take up and completion rates have been falling, and some businesses have turned their backs on it.

"The government has recognised it needs to stop this rot and shake things up. But its proposed reforms do not go far enough and lack clarity.

"It is vital that apprenticeship levy funding is given a wider scope for training and that firms get better support to deal with the financial squeeze that the system brings. There is also a deep well of intelligence collected by Local Skills Improvement Plans that must inform the future of apprenticeships.

"If our recommendations are enacted it could increase take up of apprenticeships on both sides and place the whole system on a much firmer footing going forward."

The BCC argues that adopting its proposals would help increase apprenticeship take‑up by employers and learners alike, while placing the system on a more secure long‑term footing.