Keeping London at the forefront of global business
working with and for the whole UK
The future of apprenticeships – has government been listening?
3 April 2019
It’s hard to imagine another period where the business of government has been so neglected. Brexit is sucking up Government resource and we’re not seeing much in return.
It’s therefore critical that we hold Government’s feet to the fire on priorities for our capital. We’ve been pressing the Department for Education and the Treasury for urgent reform to the Apprenticeship Levy, a major theme of our Employment and Skills Action Plan. If London is to have the skills it needs, the levy rules must change so that businesses can unlock their money and put it to good use.
We were cheered last year when the Chancellor acted on our recommendations including agreeing to review the levy. In March, I attended a roundtable as part of this review with Skills Minister, Anne Milton. A week later we held the only London roundtable in this review with the GLA, DfE and HMT. Here’s a round-up of the discussion, with some positive signs for the future of apprenticeships.
A business friendly Government?
Government appears to be listening; fortunate, since business has a long list of issues to be fixed. It’s unlikely the Government will allow business to use levy money to cover back filling staff costs, one of our asks, but other suggestions were made to add flexibility to how levy money could be spent, including on pre-employment training and the cost of developing new apprenticeship standards.
Making apprenticeships easier to navigate
A bug bear is the bureaucratic complexity. Anne Milton committed to producing a ‘how to guide’ for employers who want to transfer their money down their supply chain. She agreed to press the Institute for Apprenticeships to speed up the development of standards and improve quality; and to improve transparency around funding decisions – there is clearly a disconnect here because employers have piles of levy money going unspent while at the same time the Government says all levy money is committed.
They also need to be clearer on why they are reducing the price point for many apprenticeships, making them unviable for training providers to deliver at acceptable standards.
We discussed other recommendations from our Action Plan, including devolving underspends to London rather than disappearing into the Treasury’s coffers. The GLA offered to coordinate the use of unspent funds, working with business to ensure apprenticeships meet their needs effectively. Members asked for a clearing house approach, like the UCAS system in higher education, to match candidates to apprenticeships.
Requiring all apprentices to have 20% off the job training concerns businesses across all sectors. There is scope to be much more flexible on how this is delivered so that it doesn’t disrupt the business or apprentice, and Milton agreed.
Let business hold onto its money
With employer levy funding due to expire this month, Milton agreed pressing pause would send the right message from Government. It seems perverse that employers should lose their money while there are still major teething issues. We wait for further updates.
The review is now coming to an end and the DfE and HMT will produce a paper that feeds into this Autumn’s Spending Review, Brexit permitting.
London First will continue to be active on this issue and on the 16 May we are running a member workshop to help business get the most commercial value out of their levy money.
Become a member
Our members include over 200 of the capital’s leading employers across a wide range of sectors, with a common commitment to our capital.