Oral answer (Lords) on Creative Industries: Apprenticeship Levy - Jun 4

To ask Her Majesty’s Government what steps they are taking to ensure that Apprenticeship Levy contributions from creative industries companies are invested in creative industries skills development.

On behalf of my noble friend Lady Bonham- Carter of Yarnbury and at her request, I beg leave to ask the Question standing in her name on the Order Paper.

My Lords, the apprenticeship levy is helping employers in all sectors to make sustainable investment in the skills that they need to grow and is driving up the quality of apprenticeships. We have acted on feedback from employers in our world-leading creative industries about how they can realise the benefits of apprenticeships. That is why this year, we introduced additional flexibilities in how the levy can be used and continue to support employers in building their programmes.

I thank the Minister for the response, but it is widely accepted that for the creative industries, the apprenticeship levy is simply not fit for purpose. New figures now show that unless still greater flexibilities are built in, nearly half of the creative industries’ levy money will go unused. Why cannot levy-paying employers give even more of their unspent levy funds to apprenticeship training agencies or for other training purposes? Why can we not introduce an Open University-style credit scheme to help the many would-be creative industry apprentices who cannot meet the current minimum 12-month employment rule?

The noble Lord alluded to the fact that we have raised the transfer percentage rate from 10% to 25%, and we believe that that is the right approach. Much work is being done regarding the creative industries. For example, the focus, as the noble Lord will know, is on standards rather than frameworks. We have already developed and put through 26 standards in the creative sector, with another 16 on the go. I recognise that the creative sector is more of a challenge, in that it is quite disparate, being made up of a number of small businesses, partnerships and single people working in that sector.

My Lords, is it not clear that the Government do not understand the creative industries? Is it not about time that they set up a Joint Committee of all the departments of government to work with the creative industries to actually help rather than hinder them?

I completely disagree with the noble Lord—we are engaged with the creative industries to understand their needs. We hear directly from the sector that it is more of a challenge because, as the noble Lord will know, it is taking on apprentices from a standing start. As I said, many people are employed freelance, so there are greater challenges. But one thing that came out of our discussions with the sector is to ask apprenticeship training agencies to employ trainees. That is quite innovative. We are taking that forward and of course, it has to be monitored by the Institute for Apprenticeships.

My Lords, as the noble Lord, Lord Foster, said, 50% of the apprenticeship levy money is not actually spent, but the position cannot  be clarified because there is no transparency in the way that the industry’s sectors are broken down. Can the Minister tell us how the levies are spent and break that down by employment sector?

Yes, I can. I will need to write to the noble Viscount to give him the detail on the last part of his question, but the indications are that the change from 10% to 25% has led to some movement. Employers are realising that there is greater flexibility in the system and they are indeed beginning to consider passing funds on, particularly to their supply chains. It makes sense to benefit their sector in terms of taking on more apprentices.

Does my noble friend think that there is sufficient recognition of the time it takes for an apprentice carver or woodworker—the sort of person who works on Lincoln cathedral—to reach real proficiency? What recognition is there in the Government’s policy?

We absolutely want to take account of roles such as masons, so there are different flexibilities in the apprenticeship programme. There are the one-year and three-year schemes and 20% off-the-job training, so they get to a really good standard of apprenticeship when they come out.

My Lords, the Minister will recall that last year Peter Bazalgette led a review on how best to frame the apprentice levy to drive the creative sector. In an Answer to my noble friend Lord Foster, the Minister undertook to read that report and perhaps take some lessons from it. Now, nearly a year on, will the Minister tell us what lessons were learned by his department from the Bazalgette report and what it is doing differently now from what it was doing nearly a year ago?

There is a lot more that we are doing for the creative industries regarding the apprenticeship scheme. For example, we are working very closely with industry bodies such as the Creative Industries Council, Creative & Cultural Skills and ScreenSkills, so on the back of the Bazalgette report we are looking in greater detail at what more we can do in this important sector for the UK.

My Lords, despite what the Minister said, the Government have raised the transfer rate. According to ScreenSkills, the skills body for the screen-based part of the creative industries sector, a total of £55 million a year in creative apprentice levy payments is wasted because two-thirds of levy payers in the sector are able to use only 20% of the funds, for the reasons already outlined by noble Lords. One means of clearing that blockage would be to introduce new flexibilities which would allow employers to pool vouchers and share apprenticeships through a specialist apprentice training agency. Will the Minister agree to press the Skills Minister to meet urgently with creative sector companies to find out how that can be achieved?

Yes, I have heard about that scheme, and as the noble Lord has raised the issue I will certainly do what he has asked and take it back to the Skills Minister.

My Lords, it is very worrying that much of this levy is not being spent. Does the Minister believe that some of the viable suggestions that the industry, including ScreenSkills, has made need to be acted upon quickly, otherwise this money will be lost from the system? It is an incredible waste in a sector that is crying out for skilled workers.

It is important to say that a lot of work is being done in marketing apprenticeships. For example, we had National Apprenticeship Week in March, which generated more than 25,000 visits to the GOV.UK page. My point is that there is every opportunity for employers to take up the levy that is unspent.