Following the Chancellor’s Spring Statement, in which he discussed his proposed apprenticeship reforms - including bringing forward the £700m package of reforms to help small businesses take on more apprentices, Charlie Mullins, CEO and founder of Pimlico Plumbers gives his thoughts:
The Government investing its resources into Apprenticeships would unboundedly please me. I’ve been calling for it for years. And when I read the headlines back in 2015 of George Osborne announcing a scheme to boost apprenticeships across the country, I had a reaction much like today. Initial delight, followed very quickly by disappointment.
There’s no point having a great headline, when the actual body of the story just isn’t all that it’s cracked up to be. And that’s been the exact case with today’s Spring Statement, and the announcement back in 2015, which manifested into the Apprenticeship Levy.
Lets Scrap The Levy, Not Throw It A Lifeline!
And like I said at the start, resources going into reforming apprenticeships, or in this case ‘bringing forward the £700 million package of reforms’ would honestly be great, if it meant scrapping the inadequate Apprenticeship Levy, but instead Chancellor Phil Hammond is throwing it another lifeline.
One of the greatest problems with the Apprenticeship Levy, apart from the fact that it was a bureaucratic nightmare, was that it came in the shape of a tax on business.
See, it’s quite a simple philosophy. When the government wanted people to stop smoking or reduce their sugary soft drink intake they slapped a tax on the offending item, to get people to cut down. The new higher price made these items not only less attractive and affordable, but it was also a way of signalling, just in case people were confused about smoking and obesity, that these such things are undesirable.
And this is precisely what the government has done with the levy, which resulted in the tumbling number of apprentices. Perhaps, they didn’t intend for this to happen, but it did, so the only sensible action would be, to scrap this unhelpful tax on training and direct these funds into something better.
Making Apprenticeships More Viable Is An Investment In Our Economy
Phil was right when he said it’s about investing in people, because that’s exactly what apprenticeships are based on. An apprentice is not only an investment in your business, but it’s also an investment in the economy. And in order for the investment to be successful, Government resources must be directed into a scheme, which is more robust than the Levy.
How about putting these funds towards free travel and higher wages for apprentices? Make the scheme more attractive and viable for young people - and then this country will have a real hope in reducing the skills shortage.
And sure, I can acknowledge the Government’s attempted concession, by reducing the contribution businesses make from 10% to 5%, but quite honestly, that’s just weak.
Since the Levy has been in place, apprenticeship starts have plummeted, and there have been demands across the board for reform. At this point, keeping the Levy alive, is not only unwise, but it's damn right irresponsible.
So, what do I think of the apprenticeship reforms mentioned in the Spring Statement? A missed opportunity to put the needs of our young people first.
Charlie Mullins OBE, CEO and founder of Pimlico Plumbers
About Charlie: He understands the value of apprenticeships better than most. He found his company back in 1979 with just a plumbing apprenticeship and a bag of tools to his name – it’s now the UK’s largest independent plumbing firm. Charlie currently employs 70 apprentices in total, and is determined to help solve the skills gap and youth unemployment through apprenticeships.