Councils, business groups and education leaders have joined
together to set out how the Government could reform its
Apprenticeship Levy policy if it is to achieve its ambition of
creating millions of apprenticeships.
Latest figures show that the number of apprenticeship starts in
England has declined following the introduction of the
Apprenticeship Levy in April 2017, with 375,800 starts in 2017/18
compared to 494,900 starts in 2016/17, a reduction of over
100,000.
The Local Government Association and partners are concerned the
potential of the policy is not being realised with significant
barriers preventing the programme from working as effectively as
it should.
To mark two years since the Levy was introduced, two
dozen organisations – including the LGA, Universities UK,
the Federation of Master Builders and Skills for Care - have
written to the Education Secretary, MP, to set out how to better
deliver for apprentices, employers and the national and local
economy.
The partnership is warning Government against moves to claw back
unspent Levy funding - which will begin to happen this month - if
money is unspent within two years. This is a move which would
hold employers and the workforce back and risks exacerbating the
nation’s skills crisis.
In order to avoid losing unspent levy money and denying more
people the opportunity to improve their skills, the LGA and
partners are calling on the Government to urgently address this
by extending the date by which funds should be spent.
Employers want to use their levy funds to boost in-demand skills
such as social workers and planners, but have been unable to do
so where apprenticeships standards, against which the Levy must
be spent, have been delayed or are yet to be approved. Among the
standards yet to be approved are vital services including adult
care, early years and environmental health. Social work and
planning standards were approved 18 months after the introduction
of the Levy, while building control has recently been approved,
giving employers less than four weeks to spend their levy
money.
Currently unspent levy funds are set to be re-directed
nationally, meaning that levy paying employers have no say where
their money is going. This should not be done by central
Government alone, but with local partners and industry
leaders.
The Government has demonstrated its willingness to make the
apprenticeship programme a success, but now needs to go further
to achieve its goal. Local government and industry leaders
believe a more effective approach could be achieved by:
- Giving employers the flexibility to spend their Levy funds to
address local priorities and skills gaps, for instance by
allowing employers to use their funds to meet the full costs of
apprentice programmes, including any pre-apprenticeship
training.
- Empowering employers to
collaborate around the transfer of funds,
for instance through pooling monies. This could pave the way for
more local partnerships to co-commission provision to address
skills gaps that affect a number of employers in an area.
LGA Chairman said:
“Creating more good quality apprenticeships is critical to
ensuring that skills development supports our national and local
economies and meets the needs of employers and apprentices.
“Employers need a more flexible and effective Levy to boost
apprenticeships.
“It would be a backwards step to begin to claw back unspent Levy
funds at this stage. The money raised from the Levy must be used
in the most effective way and we want to work with the Government
and find effective solutions to delivering apprenticeships,
driving economic growth and raising productivity for the national
and local economy.
“We are committed to making a success of the apprenticeship
programme and want to work with the Government and partners to
improve the number of good quality apprenticeships.”
Brian Berry, Chief Executive of the Federation of Master
Builders, said:
“The Apprenticeship Levy needs reform if it is to do the job it
was designed to do – that is help ease the skills shortage that a
number of sectors are facing, including construction.
“The Government’s own statistics are clearly damning when it
comes to the success of the Levy to date. The number of
apprenticeship starts recorded for construction, planning and the
built environment in January of this year were significantly
lower compared to the same month in 2018.
“We need radical change if we’re to offer a quality training to
the next generation, and one vital way of achieving this is
providing a greater degree of flexibility in the Apprenticeship
Levy system.”
NOTES TO EDITORS:
- The LGA Skills Taskforce roundtables were designed to bring
together industry experts and sector representatives with an
interest in making our skills and employment system as effective
as possible. For more information click here.
- Work Local – The LGA’s vision for a place based approach to
employment and skills services can be found here.
- Separate research by the LGA suggests that by 2024, a growing
skills gap will result in four million too few high skilled
people to fill demand and eight million too many intermediate and
low skilled than there are jobs.
