Prioritise apprenticeship levy reform, Labour tells government

10 vice-chancellors wrote to the government to call for apprenticeship levy reform, highlighting that billions of pounds go unspent every year

The government’s plans for post-18 education reform must include changes to the apprenticeship levy, said Labour’s shadow education secretary.

Kate Green told an audience of apprentices at the International Skills Summit at Dudley College of Technology that reform must begin with a “fundamental review” of the apprenticeship levy, which she said had “locked out those small and medium-sized businesses who have a big role to play”.

Green said that the number of new apprentices under 25 – down by 40% since 2016 – was evidence that the levy was failing. She also pointed to overall FE funding, which is down by almost a half since 2010, as evidence that Conservative governments have not prioritised the sector.

The shadow frontbencher said that a new levy should create additional places in “businesses and regions across the country” and improve career progression, particularly for younger learners. Plans must include regionally elected teams, like the combined authorities, mayors and councils, to break what Green termed “an overcentralised system, dictated by Whitehall” and create more localised visions for training and jobs.

Labour would subsidise wages and use levy underspend “to create 85,000 new apprenticeships for young people”, Green continued. She said the party also wanted the suite of FE opportunities – T levels, Kickstart, traineeships and apprenticeships – “to work together in a more coherent way”.

Vice-chancellors back apprenticeship levy reform

Last week, 10 vice-chancellors wrote to the Treasury and Department for Education to call for apprenticeship levy reform, highlighting that “billions of pounds of apprenticeship levy funds remain unspent, due to the inflexibility in a scheme which does not match current urgent skills needs”. The vice-chancellors of Reading, Essex, Sussex, Brunel, City, Royal Holloway, Goldsmiths, Kent, Surrey and East Anglia proposed a joint working group with ministers to explore new ways forward. They suggested short boot camp-style programmes that boost work experience and key skills and in-work schools programmes as workable solutions.

By making changes to the system now, and by giving the region employment and education experts a role in how that funding is spent to meet specific localised needs, could be the catalyst to begin undoing the damage of the pandemic
– Prof Adam Tickell, University of Sussex

The University of Essex said it is required to set aside over £500,000 annually via the apprenticeship levy, paid for by student fees, but can only spend a fifth of this funding.

A statement from the university continued: “However, because of red tape and stringent conditions on its use, each year the university can only spend around £100,000, with the balance paid over to the government. More flexibility in the rules would mean this resource could be redirected to support students in further training in the skills most in demand to drive our national recovery.”

Prof Adam Tickell, vice-chancellor and president of the University of Sussex, said: “At present the apprenticeship levy is too rigid in its structure and it is not helping as many people as it should.

“By making changes to the system now, and by giving the region employment and education experts a role in how that funding is spent to meet specific localised needs, could be the catalyst to begin undoing the damage of the pandemic and help build a sustainable economy for all.”


Read more: 30% of pandemic spending on education is not new money, IFS finds

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