The research, by training provider City & Guilds and business training association The 5% Club, found just one in 25 (4%) employers that pay the levy make full use of their funds.

Under the levy, employers with a wage bill of more than £3m must contribute 0.5% of their pay bill to a fund earmarked for apprenticeships.

The underuse of companies’ levy funds will result in nearly half being redirected to the treasury, effectively as tax: over £600m has been returned to the treasury in the past 12 months, according to separate research by supermarket Co-op.

Kirstie Donnelly, CEO of City & Guilds, told Printweek that the apprenticeship levy needed reform. 

She said: "The apprenticeship levy in its current form isn’t fit for purpose.

“Businesses and HR departments are working hard to upskill their workforces. But they’re up against a system that clearly doesn’t work for them."

Almost one in five employers (18%) said access to funding involves too much bureaucracy or administration. Nearly all (96%) said they would like to see reform to the levy.

Jonathan Bray, managing director of print training company Learn2Print, told Printweek that while printers have largely found the system straightforward, many simply don’t have space for more apprentices.

He said: “There are companies whose problem is that they end up with large pots of money in the kitty. They’re not spending it, and the problem is that they are not actually in a position to employ any more staff. [...]

“There’s no use taking an apprentice on, unless you can support them with a proper mentor and give them a training plan. [These companies] can’t take apprentices on, because there is not anyone to take them on and manage them.”

Donnelly added that many employers would like to be able to use their levy funds for a broader range of training programmes, without the strict requirements of apprenticeships.

She said: “By making funding easier to access and use, this would allow businesses and their HR departments to have more jurisdiction over how they spend their allocated funding, in turn helping them to be more effective in training up staff.”

Full apprenticeships, however, can be a perfect way to get younger people into the print industry, according to Karly Lattimore, managing director of BPIF Training.

She told Printweek: “Apprenticeships can go a long way in addressing the skills gap in our industry as they provide individuals with the on and off the job training needed to meet the demands of a range of roles.

"Building this pipeline will ensure that the industry has a steady supply of individuals with the necessary knowledge and skills to meet the ever evolving skills needs.”

Under the scheme, a portion of unspent funds can be transferred to a smaller employer, to help fund local apprenticeships, for instance.

Lattimore added: “Whilst apprenticeships may not be right for all levy paying employers we would encourage businesses who do have unspent apprenticeship levy finds to engage in the levy transfer scheme, where they can support smaller businesses in recruiting and training their workforce of the future.”

Brendan Perring, general manager of the IPIA, said apprenticeships are an important tool in protecting the industry from the effects of an ageing workforce.

He told Printweek: “Not enough new talent is entering the industry at the bottom, which is a problem for the sector’s future resilience and continuity. Printers should consider an apprentice for two primary reasons. 

“Firstly, it is a great way of bringing in an extra pair of hands who can not only bring incredibly useful suggestions to the company in areas like social media but who can also be moulded to the to the company's culture from the get-go. 

“If they have the right mindset, which is the priority during recruitment, you have the potential to develop an individual who can be part of the fabric of the business going forward. If you invest in them, the return can be significant.”

Apprenticeship starts across the UK remain significantly below pre-levy levels and employer investment in training has continued to decline, according to Lizzie Crowley, senior policy adviser at the CIPD, the industry body for HR professionals.

She told Printweek's sister title HR magazine: “The CIPD has been calling for a reform of the apprenticeship levy into a broader skills and training levy, and we welcome this research which underlines the critical and urgent need to reform the system.”