New apprenticeship proposals provoke mixed response

Last week (12 August) the government published proposals for a new funding model for apprenticeships and further details on the apprenticeship levy.

Under the new plans, the government has proposed that companies which are too small to pay the levy – around 98% of employers in England – will have 90% of the costs of training paid for by the government. It has also claimed that extra support – worth £2,000 per trainee – will also be available for employers and training providers that take on 16- to 18-year-old apprentices or young care leavers. Employers with fewer than 50 employees will also have 100% of training costs paid for by government if they take on these apprentices.

Kirstie Donnelly, Managing Director of City & Guilds UK, commented: “It is particularly positive to see the government take steps to encourage SMEs to hire apprentices by removing their contribution, so they are able to employ 16- to 18-year-old apprentices for free.

“We were also pleased to note that levy paying companies will be allowed to share up to 10% of their payment with other companies on the digital apprenticeship system from 2018. As we set out in our Making Apprenticeships Work research last year, ensuring small businesses are well-placed to support apprenticeships is fundamental if we are to transform the prospects of the next generation.”

Jonathan Clifton, IPPR Associate Director for Public Services, said: “The government is absolutely right to introduce an apprenticeship levy. Following Brexit, British employers may not be able to rely on recruiting migrant workers to fill skills gaps – so we’ll need more apprenticeships to train up our domestic workforce. The government have made a number of steps in the right direction – including introducing an apprenticeship levy – but there is more work to be done to ensure that all young people have access to high quality ‘earning and learning’ routes.”

While the government’s proposed investment in apprenticeships has been largely welcomed, the CIPD has stated that pressing ahead with the apprenticeship levy is “irresponsible”. There are also concerns that the April 2017 levy start date for will not give firms sufficient time to prepare.

Ben Willmott, Head of Public Policy at the CIPD, said: “It is disappointing the government has not taken the opportunity afforded by a new ministerial team – and change to the department responsible for skills policy in the UK – to look again at the apprenticeship levy. The very valid concerns regarding the levy in its current form are wide-scale across organisations from the private, public and voluntary sectors and it is irresponsible for the government, particularly in a time of economic uncertainty in the aftermath of the referendum, to simply press ahead with a policy that is not fit for purpose.

“Our research suggests the levy, in its present form, will undermine efforts to improve the quality of apprenticeships. This is a time where we need to be raising the status of apprenticeships, not pursuing a policy which will have the effect of devaluing the ‘apprenticeship brand’.”

The CBI’s Director-General, Carolyn Fairbairn, supports this view: “We welcome the government’s focus on growing investment in apprenticeships, and business stands ready to step up and increase its own commitment. However, the apprenticeship levy in its current form risks turning the clock back on recent progress through poor design and rushed timescales.

“Without a radical rethink it could damage not raise training quality. This really matters because of the crucial importance of closing the skills gap to improving the UK’s lagging productivity.”