Industry calls for apprenticeship levy payers to be able to fund wider skills training from their levy cash

Published:  25 July, 2019

Britain’s manufacturers are calling for an urgent rethink to Government’s Apprenticeship Levy to make access to funding more flexible so that industry can develop the essential skills of the future.

The call comes on the back of a report by Make UK, An Unlevy playing field for manufacturers, which reveals that 95% of manufacturers want to see the Apprenticeship Levy changed and just 5% happy with the current system. This figure has not changed from a year ago, showing that manufacturers’ frustrations remain strong.

A lack of appropriate apprenticeship training standards (training course criteria) available to employers to deliver the skills their businesses need is preventing employers from training the new generation of workers, fill vital skills gaps and growing their businesses. Half of manufacturing levy-payers (50%) now want to see the Levy re-worked, giving them flexibility to spend the levy they pay on all forms of training for all their employees, not just apprenticeships.

Less than one-in-five levy payers is currently manging to spend all of their levy funds with one in five manufacturers in this latest Make UK survey saying they would prefer to see the Levy scrapped altogether.

Tim Thomas, director of labour market and skills policy said:

“The apprenticeship levy was rushed in development, hurried in implementation and has been caught ever since in systemic chop and change. It’s little wonder then that manufacturers overwhelmingly want to see real change, not tinkering at the edges of a skills system that is just too slow, too complex and increasingly too late to deliver the skills needed by tomorrow’s technologies. That’s why over 95% of manufacturers say the Apprenticeship Levy must be changed while one in five want it scrapped altogether.

Now is the time for Government to be both quick and bold – opening the levy pot up to other forms of technical, work-based training and re-focussing it on getting all workers the skills they need to get on and get up the skills ladder.”

Despite the challenges, manufacturers remain champions of apprenticeships with 65% having recruited an engineering apprentice in the last 12 months and 44% recruiting an apprentice in other parts of their business.

Manufacturers indicate they will further pick up the pace in the year ahead with 73% planning to recruit an engineering apprentice and 48% an apprentice in other departments.

However, 11% of manufacturers say they have delayed or cancelled an engineering apprenticeship directly because of the Levy. With almost six in ten (58%) of manufacturers typically recruiting apprentices aged 16-18 years old this means that many young people will have missed out on the chance to gain invaluable training and a future job.

Only one in five (19%) of manufacturers spent their Levy in the last financial year, and while one in five (18%) are yet to crunch the numbers, the remaining companies are spending around 26-50% of their funds.

Make UK has a long-standing reputation as one of the UK’s leading experts in the field of Apprenticeship training. Over 1,000 Apprentices a year are trained for some of the UK’s biggest companies at its state of the art Technology Training Centre in Birmingham.

The survey covered 205 manufacturers, included both Levy paying and non-Levy paying companies and was conducted during April 2019.

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