With the latest statistics showing that the numbers starting an apprenticeship have fallen by 4.8% since 2018/19, and the numbers completing their apprenticeship have fallen by 31.5%, their are calls for the apprenticeship levy to be broadened in terms of what types of training that the levy funds.
Apprenticeship Levy Reform
In research carried out by the Chartered Institute of Personnel and Development (CIPD) to mark the 5th anniversary of the apprenticeship levy, the CIPD found that 51% of employers want to see the monies raised through the apprenticeship levy to be used to fund a broader range of workplace training. Just 17% of employers supported the idea of continuing with the apprenticeship levy in its current form.
Throughout the 5 year troubled history of the apprenticeship levy, there have calls to make the levy more flexible and to widen the use of funds. As far back as 2019, a survey conducted by City & Guilds Group found that 92% of firms who pay the apprenticeship levy wanted greater flexibility in terms of the type of training the monies are spent upon
Broadening The Use Of Levy Funds
The senior skills adviser at the CIPD, Lizzie Crowley, argues that "at a time of acute skill shortages and a decline in skills investment, when public funding is tight, we cannot allow this situation to continue; we need to be developing future talent pipelines and making sure any investment in this space is well-targeted."
Crowley adds: "Reforming the existing levy and turning it into a broader and more flexible training levy would allow employers to develop existing staff through other forms of accredited, and cost-effective training, focused on tackling technical skills shortages in the economy. This would then also free up more funds to offer apprenticeships to young people who would benefit from them most."
Government To Make Changes
The Education and Skills Funding Agency (ESFA) have announced a number of reforms to the apprenticeship levy, which the skills minister, Alex Burghart, asserts will make the apprenticeship levy more "simple and user friendly." The changes will come into force in August 2022.
The changes include the following:-
- Taking greater account of previous training and experience to remove training that is not required, in order to speed up the apprenticeship
- Specifying the minimum number of hours a full-time apprenticeship must spend on training
- Changing the requirements as regards English and Maths
- Making the payment service more efficient
However, whilst these changes have been widely welcomed, they fail to address the issue of broadening the use of apprenticeship levy funds.
Reaction
Commenting on the need for reform of the apprenticeship levy, the national chair of the Federation of Small Businesses (FSB), Martin McTague, contends that: "Apprenticeships are a great way to bring fresh perspectives into a business and upskill the next generation, so it’s been really disheartening to see such a drop off in starts, especially within young people, in recent years....policymakers [need] to look at how they can get more unspent levy funds into the small businesses that are keen to champion social mobility and can really make a difference in this space."
The Chief Executive of the British Retail Consortium, Helen Dickinson, added: "The current Apprenticeship Levy system is broken. It is inflexible, outdated, and it needs reform, otherwise retailers are forced to treat the Levy as little more than a tax. Retailers continue to invest in their workforce, however the government must redouble its efforts to find broader usage opportunities for the Apprenticeship Levy to ensure the industry continues delivering on its mission of a higher skilled, more productive, and better paid workforce. The benefits will be far-reaching and will help to create more jobs and boost local economies of areas which need it the most."
