Businesses say a range of factors put them off hiring apprentices.
Hannah Larsen, policy officer at the British Chambers of Commerce, said demand for degree apprenticeship was rising “at a time when businesses’ operating margins are under increasing pressure”.
“Higher employment costs, alongside wider economic uncertainty, mean recruitment is being paused, with younger and less experienced workers hit hardest,” she said.
She added that there was “considerable uncertainty over the future of apprenticeship funding”.
At Yorkshire-based manufacturing company Fives, most apprentices are at lower levels and study at nearby Keighley College, but there is one degree apprentice.
Jo Jackson, head of human resources, said she would like to hire more apprentices but training is expensive and the content apprentices are taught is not always “flexible enough”.
“Business needs are changing all the time, but it’s very, very difficult to change the syllabus,” she said.
“If we think about AI and how it’s changing the world of work, the apprenticeships don’t cover that.
“They can’t change quickly enough to keep up.”
Competition for some applicants is steeper than others, according to Stephen Evans, chief executive at Learning and Work Institute, who says you are “less likely to get one if you’re from a working-class family”.
A DWP spokeswoman said the government was introducing a bursary for apprentices whose families receive Universal Credit.
Commenting on the rise in demand more generally, she added: “We’re backing employers who take on young apprentices, including hiring incentives worth up to £8,000, and making apprenticeship training completely free for businesses for eligible young people aged 16 to 24.”