Asked by
To ask His Majesty’s Government what assessment they have made of
the sectoral disbursement of the take-up of the Apprenticeship
Levy.
The Parliamentary Under-Secretary of State, Department for
Education () (Con)
My Lords, employers are at the heart of our apprenticeship
system. They have developed more than 660 standards across a
range of occupations, and they choose which apprenticeships they
offer and when. The health and care, business administration and
law sector subject areas were each around a quarter of starts
last year, benefiting employers operating across all sectors of
the economy. We have also seen recent growth in the digital and
construction sector subject areas. The apprenticeship levy will
enable us to increase funding to £2.7 billion by 2024 to support
employers in all sectors to invest in apprenticeships.
(Lab)
I thank the Minister for her Answer. As one of the few in your
Lordships’ House who attained not a degree but a technical
qualification—I am immensely proud of my HND—I understand the
need for technical education. The apprenticeship levy is seen by
many employers, especially those unable to recoup their
contributions, as a training tax. This is due to the current
scheme’s inflexible, rigid and bureaucratic nature. Does the
Minister recognise the need to redress these problems? If so, are
there any plans to extend the sectoral remit, the timescale of
study and draw-down and the level of application, and thus help
improve the apprenticeship schemes?
(Con)
I think the noble Lord would agree that this country needs to
invest more in the skills of the workforce, both those entering
the workforce and those currently in it. The last thing we need
to do is cut back on the amount of funding going into
apprenticeships. I remind the House that of the £2.5 billion last
year, there was an £11 million underspend, so it was fully
disbursed. We do offer employers flexibility; we are spending
£550 million on skills boot camps for the kind of short courses
to which the noble Lord alludes, as well as working in particular
with the creative industries to offer flexible
apprenticeships.
(CB)
My Lords, what assessment have the Government made of the results
of initiatives to increase and broaden the take-up of
apprenticeships, such as flexible apprenticeships, making it
easier for small businesses to host apprentices, and levy
transfer schemes, enabling larger employers to transfer unused
levy to businesses in their supply chains? Given the seemingly
limited impact of these schemes to date, what plans does the
Minister have to increase the flexibility of the levy so that
more businesses in more sectors, and especially SMEs, are able to
make use of it?
(Con)
I do not completely accept the suggestion that the noble Lord
makes; 41% of all apprenticeship starts were in SMEs in 2020-21,
up from 38% in 2019-20. We have a lot of initiatives. For
example, we have lifted the cap on the number of apprentices a
small business can take on. In the area of the creative
industries, which I alluded to, we are expecting 1,500
apprenticeship starts through the flexible apprenticeship
scheme.
(LD)
My Lords, I thank the Minister’s department for always giving
fulsome Written Answers. From Written Questions we can see that
the number of young people not in education or training is
largely static, although this year it is estimated to be
1,857,000. The worrying trend, however, is that the number of 19
year-olds is going down year on year and is at 22.4%. The
Minister talked about skills, and the other worrying trend is
that the number of those people doing intermediate
apprenticeships is at its lowest level ever at 22.4%, while
higher apprenticeships and advanced apprenticeships are at their
highest level. This goes against the whole basis of why the
apprenticeship scheme was set up by the coalition Government.
(Con)
The apprenticeship scheme has two important objectives. One, as
the noble Lord touched on, is to give young people a choice of
opportunities as they enter their career—training, work
experience and so forth. The other is to give our employers the
skills they need in their workforce. The scheme is currently
balancing those two things.
(Con)
My Lords, as a former chairman of the Engineering Training
Authority I am clearly very conscious of the work in that
particular sector. What is the position today? Is a sufficient
number of young people coming forward for apprenticeships in the
engineering sector?
(Con)
Engineering and manufacturing technologies account for about 14%
of all the apprenticeship starts. Last year that was about 49,000
apprentices.
of Hudnall (Lab)
My Lords, the Minister mentioned the creative industries in a
number of her earlier answers. I believe she said most recently
that 1,500 starts are expected within those industries. Can she
tell the House—and if not, can she please write on the matter—how
many of those 1,500 are being undertaken in small and
medium-sized enterprises within the creative industries?
(Con)
Given that the creative industries are full of small and
medium-sized enterprises, I assume that it is the vast majority.
If it is different from that, I will write to the noble
Baroness.
Lord Clarke of Nottingham (Con)
My Lords, in recent years a practice has sprung up in British
industry of not training staff but recruiting them directly,
already trained, from overseas, often from countries that could
benefit from having their own trained staff stay at home. This
leads to the shortages of skilled staff that we have in the
economy and surges in immigration through work visas, which we
find difficult to accommodate with housing and adequate social
services. Can the Minister confirm that the Government will not
waver in their application of the apprenticeship levy, which is
making an important difference in stimulating firms to start
training their own staff in the way that they used to? Will the
Government also take steps to stop the abuse of the levy when it
sometimes gets employed for management training for long-serving
senior managers, who would be trained by the company anyway in
the ordinary course of events?
(Con)
I am happy to reassure my noble friend that we have no plans to
do away with the levy. Indeed, as I said, based on the OBR
forecast we expect it to increase to £2.7 billion in 2024-25. The
levy is part of a wider strategy to offer more flexible
opportunities, such as modular learning and the lifelong loan
entitlement, to potential employees and address the skills gaps
of employers more effectively.
(Lab)
My Lords, the chief executive of the CIPD has said that the
apprenticeship levy
“has failed … Without reform it will act as a handbrake on
employer investment in skills”.
Given reports that more than £2 billion of the levy money has
been clawed back by the Treasury rather than being spent on
apprenticeships, is it still genuinely the Government’s view that
the levy as it stands is fit for purpose?
(Con)
It is the Government’s view. Again, if we look at the trend in
the use of the levy, we have seen an increase in adoption and use
of the levy by employers, both levy-paying employers and much
smaller enterprises. We are committed to offering all sorts of
flexible and shorter courses, and to funding those to meet key
skills gaps. We think this is a critical part of our
strategy.
(Con)
My Lords, I was pleased to see that, among other measures, the
Apprenticeship Diversity Champions Network has been set up to
provide practical advice on how to attract more women into STEM
roles in industries that have historically been dominated by men.
The first quarter of 2022-23 saw 13% more women start STEM
apprenticeships. Can the Minister say what other measures will be
taken to build on this progress?
(Con)
Obviously there are a number of different initiatives, both
within schools, particularly in relation to girls and young women
to increase their awareness of and aspiration to become involved
in the STEM sector, and, in turn, working with employers and
holding them to account in terms of how and where they recruit.
