Verity Davidge, Head of Education and Skills Policy, EEF

EEF represents some of the best manufacturing and engineering apprenticeship employers there are. Apprenticeships in our sector are very much the gold standard apprenticeships – known for their quality. Apprenticeships have been ingrained within the sector for decades. They are one of the key ways manufacturers secure the skills they need for the future.

That’s why they stand firmly behind the Government’s ambition to create more quality apprenticeships.

Manufacturers saw potential benefits from the Apprenticeship Levy – increasing the number of apprenticeships, driving responsiveness of colleges and training providers and giving employers greater purchasing power to buy the training provision they need. The Apprenticeship Levy had some laudable aims.

What was once a win-win, has now turned into a lose-lose

But what was once a win-win, has now become a lose-lose. The number of apprenticeship starts has fallen dramatically. And even if we ignore the headline statistics on quantity, various reports suggest that quality is taking a hit also with training being rebadged as an apprenticeship and standards nowhere near the quality benchmarks of our international competitors.

Manufacturers cannot afford to stop training apprentices altogether so where possible have powered through what has been a costly and complicated programme of reform,

That said, one in ten have either delayed or cancelled an engineering apprenticeship specifically because of the Levy.

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These are apprenticeships that could have been created, these are opportunities that could have been available to young people, but because of the complexity and rigidity of the Apprenticeship Levy and wider reform programme have not.

We need to add value in the system. If we haven’t added any value, then what was the point of this radical reform?

Broken promises? Manufacturers kept their end of the bargain but Government has not

It was in one of the (many) consultations the Government has published following the Richard Review of Apprenticeships, that the Government made promises on the Levy to employers: the Levy will be simple; the Levy will be fair; the Levy will allow employers to get back more than put in; the Levy will give employers real control.

But these promises have been broken. EEF’s new report ‘A Levy Price to Pay: The Apprenticeship Levy One Year On’ highlights the stark difference between the Government’s “vision” and manufacturers’ “reality.”

And what does reality look like for manufacturers? Well it looks like a very challenging journey:

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Manufacturers case for change: save before we scrap

Only 5% of manufacturers want to leave the Levy as it is. The overwhelming majority are looking for some form of change…or scrapping the system entirely:

  • 52% of manufacturers want to see improvements made to the Apprenticeship Levy
  • 26% want to see the Levy widened to a training Levy payable by all businesses
  • 17% want to see the Levy scrapped entirely

But those wanting to save the Levy have some major caveats.

They want to see change, and they want to see it now.

That’s why we have set out 7 key recommendations in our report which have the potential to create more quality apprenticeships in the system and get the Levy back on track.

  1. Move the Apprenticeship (Levy) Budget from Department Expenditure Limit (DEL) to Annually Managed Expenditure (AME)
  2. Increase the lifetime of funds that employers have to spend their Levy to at least 48 months
  3. Review the funding band structure, removing the upper limit
  4. Expand incentive payments to employers, providers and learners for STEM apprenticeships
  5. Increase the amount of unused funds employers can transfer to over 50% and remove restrictions on transferring to a single employer
  6. Allow employers to agree a payment schedule with their provider
  7. The process of signing off standards must become quicker and more transparent and empower the role of employers further

Getting apprenticeship policy, and wider education and skills policy right is more important than ever as the UK prepares to leave the EU.

Manufacturers are committed to playing their part but Government must act now and fix what is clearly broken in the system.

Verity Davidge, Head of Education and Skills Policy, EEF

About EEFThe manufacturers’ organisation, is the representative voice of UK manufacturing, with offices in London, Brussels, every English region and Wales. This year we celebrate 120 years of backing Britain’s makers. Collectively we represent 20,000 companies of all sizes, from start-ups to multinationals, across engineering, manufacturing, technology and the wider industrial sector.

We directly represent over 5,000 businesses who are members of EEF. Everything we do – from providing essential business support and training to championing manufacturing industry in the UK and the EU – is designed to help British manufacturers compete, innovate and grow. From HR and employment law, health and safety to environmental and productivity improvement, our advice, expertise and influence enables businesses to remain safe, compliant and future-focused.

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