The government’s new £3bn apprenticeship levy threatens to deepen Britain’s north-south divide, according to a new analysis, with London and the south-east benefiting most from the government’s shakeup of staff training.

The Institute for Public Policy Research (IPPR) has warned that the apprenticeship levy, which comes into force next month, will raise less money and have a smaller impact in the areas that need it most. These areas are those that have been hit by deindustrialisation and suffer from low levels of qualifications, low productivity and low pay.

The new levy is designed to increase the number and quality of apprenticeships in the UK, with the government aiming to create 3 million new placements by 2020. It will be paid by employers in England with a payroll of more than £3m and charged at a rate of 0.5% of their annual wage bill. The Treasury has estimated it will raise nearly £3bn a year.

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