Business groups London First and the North West Business Leadership Team (@NWBLT) today (Monday) joined forces to call for changes to the current apprenticeship levy to boost numbers, as a new report revealed that millions of pounds of funds remain unused and new starts for 16- to 18-year-olds have fallen since the levy was introduced.
£2bn Levy Underspend: Has the demise of the levy been much exaggerated?: #Apprenticeships 2020: Expiring #Levy Funding and Premature Success Rates - Don't Panic Yet! There has been a lot of speculation about whether Levy Overspend could causing… https://t.co/uFhZ22PAC6 pic.twitter.com/g6LlccarNe— FE News - The #FutureofEducation News Channel (@FENews) January 20, 2020
The report, "Delivering the Workforce of Tomorrow - Boosting England’s business-led apprenticeship system", launched at the start of National Apprenticeship Week, makes clear that while business is deeply committed to apprenticeships, the current system is inadvertently acting as a significant drag on uptake.
Among the measures the business groups are calling for are: enhancing the Institute for Apprenticeships and Technical Education to act as a one-stop shop for information; giving businesses greater flexibility in how they use their funds; ensuring effective quality assurance; and streamlining the standards process.
Jasmine Whitbread, Chief Executive of London First, said:
“Many firms want to take on more apprentices but are hamstrung by a needlessly complex and inflexible system.
“With skills shortages already biting, and likely to be worsened by changes to the immigration system, it’s vital the Government urgently takes action to reboot the system.
“Businesses – north and south – are calling for simple changes to make the system more flexible and responsive to boost the numbers of young people able to access high-quality training across the UK.”
Recent research found that almost a fifth of businesses (17%) have not used all of their Apprenticeship Levy funds, with Government figures showing that £96m of unused funds expired in Summer 2019 alone. At the same time, many are finding it challenging to transfer levy money to smaller businesses, which have traditionally been major recruiters of young people: new starts for 16-18-year-olds have fallen by nearly a quarter since 2016.
Sandy Lindsay MBE, Skills Lead and Vice Chair, North West Business Leadership Team:
“Having a skilled workforce is fundamental to the future success of our economy and, thus, businesses are keen to continue their support for the apprenticeship system but want to ensure it is working for large and small employers.
“The NWBLT partnered with London First to analyse this vital topic and the report we are launching today puts forward ideas for pragmatic, practical changes that the new Government can implement. These changes, both short and long term, will have a positive effect on the recruitment and retention of apprentices across, not just the North West and London, but the whole of England.
“We hope that the Government will act on these ideas quickly to ensure that young people get the best start to their working life through an apprenticeship. And we hope that they see this report as the start of an open, positive dialogue between them, us and our members.”
Delivering the Workforce of Tomorrow - Boosting England’s business-led apprenticeship system sets out a comprehensive action plan, backed by training providers, local government bodies and businesses across England, to reform the system.
The business groups are calling for four pragmatic changes:
- Enhance the Institute for Apprenticeships and Technical Education’s (IfATE) position as an employer-driven ‘one-stop-shop’ for information and support. Review the current approach to increase direct interaction between business and the Institute. Better support through the IfATE will enable businesses to engage with the system more effectively and with greater confidence in what they are doing. A single authoritative communicator of information will provide clarity.
- Give businesses greater flexibility in how they use funds and transfer them to other businesses. Greater flexibility will allow businesses to support a broader range of training activities. Simplified rules and greater flexibility in how funds can be transferred to other businesses will ensure funds can be spent on training where it is most required for our wider economy.
- Ensure that effective and robust Quality Assurance processes underpin the apprenticeship system. A focus on robust Quality Assurance will reassure businesses about the value they receive from engaging with the system and will help to enhance the system’s public reputation and brand.
- Streamline processes so that all Standards are approved within eight months and so that reviews are carried out quickly and regularly to keep Standards up-to-date. Streamlined processes will improve the apprenticeship system’s ability to respond quickly and effectively to changing skills needs.