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Reform Urgently Needed For Effective Apprenticeship Levy

Apprenticeship Levy reform is required
27 September 2019

Urgent steps must be taken by Government to reform the Apprenticeship Levy in England, so firms can offer more of the high-quality training they need to succeed.

That’s according to a new CBI report, ‘Learning on the job: Improving the Apprenticeship Levy.’

Employers invest over £44 billion a year in skills training, says the report and firms have welcomed recent Government efforts to evolve the Apprenticeship Levy. Yet two years on from system’s introduction, the overall number of apprenticeships starts remains significantly down.

With growing financial pressure raising questions about the sustainability of the Apprenticeship Levy, the Government must now urgently launch its promised public consultation on Levy plans after 2020, the CBI report says. The consultation is only three months away.

Matthew Fell, CBI Chief UK Policy Director, said: “With apprenticeship starts significantly down, it’s clear that the Levy is not working as intended. Despite its rocky start, employers want to support the Government’s efforts to evolve the system and play their part in making the Levy work.

“Without urgent action, the Apprenticeship Levy risks becoming a roadblock to the Government’s wider efforts to modernise the skills system."



Fell continued: “Businesses are confused and crying out for clarity on how their Levy funds are being used.  They read speculation in the papers that the Levy is overspent but are themselves struggling to utilise their Levy funds for training.

“The Government must do as it has previously promised and urgently consult businesses about the Levy’s future well before the end of the year.  Many companies want the Apprenticeship Levy to broaden into a Flexible Skills Levy, so they can deliver more high-quality training that helps grow their business and gives people successful careers.”


Recommendations for reform include:

Increase transparency around Levy receipts and expenditure - Enabling firms to better understand how the Levy system is working, what’s being funded by the Government and how their contributions are being spent

Make the Levy system more user-friendly - Engage smaller firms with practical, online support and locally led ‘matching services’ which allow large firms to pass on unused funds

Create a sustainable financial plan for the Levy budget -Introduce a £100 million annual Government top-up to the Levy budget – so that Levy payers and SME non-Levy payers can continue using the scheme to spend on apprentices of all ages and skill levels

Open up conversations about the future of the Levy - Government should urgently fulfil its commitment to publicly consult on options after 2020 - including broadening the Apprenticeship Levy into a Flexible Skills Levy, which would cover a wider range of high-quality, relevant training.


Article written by Brian Shillibeer | Published 27 September 2019


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