Time for change – why we need an apprenticeship levy fit for the future

2023’s National Apprenticeship week has been a fantastic opportunity to celebrate the outstanding work of apprentices and employers across the UK. The full breadth and depth of what apprenticeships can offer has been highlighted, with the diverse range of careers which can be accessed being brought to the fore.

A lack of flexibility within the current system

However, despite their potential, apprenticeships are not currently being used to their maximum effect. Our own research shows that employers are struggling with the lack of flexibility within the current system and are more often than not unable to make use of levy money as it doesn’t always reflect the the forms of training that they, and their staff, need.

Unused Levy Funds

Based on a recent FOI request submitted by City & Guilds, we know that £3.5bn of levy funds have gone unused over the last 6 years. This is a missed opportunity for young people in particular, as well as for employers who, as we know, are often facing acute skills shortages in a post Brexit world.

In our recent Levying Up report, we found that employers felt that the current system created a number of barriers that prevented them for accessing Levy funds. 94% of the HR leaders we surveyed highlighted at least one barrier to accessing levy funds, including convoluted bureaucracy and administration and a lack of time available to support apprentices during their training.

It’s no secret that we have seen the number of small and medium sized enterprises (SMEs) recruiting apprentices plummet since the level was introduced in 2015. The bureaucracy of the system is preventing these smaller businesses from acquiring the skilled staff they require, stymying talent pipelines in industries and restricting the number of opportunities available for would-be apprentices.

A more flexible system offers more opportunities to learners

A more flexible system with the scope to make levy funds accessible for a wider range of training schemes (but with a significant proportion ringfenced for apprenticeships) has the potential to offer more opportunities to learners, and to support employers in being able to acquire staff with the skills needed to combat shortages.

Currently, government plans for the apprenticeship system include a reduction in the availability of level 2 apprenticeships. We vehemently disagree with this. These training routes have historically played an essential role in allowing young people who hadn’t achieved at school take the first step into their careers, while also assisting SMEs in connecting talented young people. To limit the availability of these opportunities would only serve to compound the existing skills shortage and restrict the opportunities available to young people who are already often being left behind.

We must urgently address the challenges that employers told us they are facing now

Apprenticeships should form a key pillar of workplace training, but the current funding system is failing to meet the needs of learners and employers alike. We must urgently address the challenges that employers told us they are facing now. If we look back in five years’ time and see that another £3.5 billion of much needed skills funding has disappeared into the ether, rather than paying for much needed training, something would have gone very wrong indeed.