Fine-tune Apprenticeship Levy to boost uptake, say business groups
15 November 2019
Almost a fifth of businesses leave apprenticeship levy unspent, say London First & North West Business Leadership Team
A poll of more than 500 business leaders in England for business groups London First and the North West Business Leadership Team (NWBLT), released today (Thursday), shows strong support for the apprenticeship levy among firms, but reveals its full potential is not being exploited with some firms failing to spend their full allocation of funds.
The Survation poll reveals that two-thirds of firms (67%) say they have been able to recruit the number, type and quality of apprentices that meet their needs in the past year. A quarter (26%) were not able to and7% were unsure.
However, underspending of the apprenticeship levy is a problem, with almost a fifth (17%) saying that they had not used their full allocation. It comes after the Government revealed in September that £96m of unused funds had expired in the previous two months alone1.
Ahead of Skills London, the capital’s largest job and careers fair, London First and North West Business Leadership Team are calling on the next Government to make some small but critical changes to improve the system from enabling Levy transfers to firms in supply chains to fund training for 16 – 18 year olds, to allowing funds to be used on a wider range of activities.
Mark Hilton, Executive Director for Employment and Skills at London First, said:
“Skills shortages are one of the biggest concerns facing businesses across the country.
“It is positive that businesses have started to get to grips with the apprenticeship levy, but some quick and simple changes will make it work even better and avoid cash languishing unspent because firms aren’t able to spend it.
“That’s why we’re urging the next Government to widen the scope of how funds can be used, and extend Levy transfers to fund training for 16 – 18-year-olds, which will help boost investment in apprenticeships.”.”
Sandy Lindsay MBE, Skills Lead for NWBLT and Chair of Tangerine Group and the Juice Academy
“The North West Business Leadership Team offers many opportunities for young people throughout its members’ workforces and, as a group, are determined to help this age group get work experience and improve their skills. We are therefore delighted to be partnering with London First looking specifically at the vital topic of apprenticeships.
“We will be putting forward some ideas for practical changes that the new Government can implement based on the results of this survey. There is the opportunity for some immediate actions to be taken which will have a really positive effect on the recruitment and retention of apprentices across, not just the North West and London, but the whole of England. We are looking at both short and long term changes that can be made to the system which will impact on large and small firms and 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.”
Over half (53%) of businesses polled have increased the number of apprentices in their organisation over the last two years, and just 6% say that they plan to decrease the number of apprenticeships in the future2. This highlights the opportunity for changes to the system to have an immediate impact on the future pipeline of talent for firms across the country.
The survey suggests that the next government should make simple, pragmatic changes to the Apprenticeship system, to improve its impact:
A single website, linking to key information, to help the business access and provide information about the apprenticeship system (58% of those surveyed);
Enabling Levy transfers to their supply chain, to fund training for 16 – 18 year olds (33%);
Extending the spending window beyond the current two years (30%);
Allowing Levy funds to be used on more activities, such as pre-employment training and apprentice travel costs (32%).
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