Fixing the Apprenticeship Levy

27 March 2018

The deputy director of the CBI says the government must urgently reform the Apprenticeship Levy if it is going to deliver great training and jobs.

Speaking at the Annual Apprenticeship Conference & Exhibition last week the deputy director said skills shortages is the biggest risk to UK growth and competitiveness and it must be addressed, but the Apprenticeship Levy in its current form is not the way to do it.

In his speech Josh Hardie said that however serious the faults with the levy’s design, they are not insurmountable and that the CBI see three ways to improve the levy – and unlock the business commitment to skills:

  • First, ministers need to immediately loosen the rules around how levy cash is spent
  • The 10 percent transfer rule comes in next month. But firms should be able to draw down more than 50 percent, so they can use it to work with others to create centres of excellence for training, in exactly the same way that we’ve done for healthcare, tech and defence
  • Next, the government must acknowledge that even ten million apprenticeships won’t matter if they don’t lead to good jobs. They should redouble their commitment to replace frameworks with standards, pushing ahead with the Apprenticeship Reform Programme
  • And in the same vein, providers too should lead from the front, and make sure that they’re offering high-quality apprenticeships in areas that suit local businesses
  • Finally, the Institute for Apprenticeships needs proper teeth as an independent skills regulator. We need a system where business and people are able to influence changes, based firmly on the commercial understanding that people and companies are customers, and providers are suppliers

“We all want this levy to work. Recognising these three changes could turn the levy into a system that delivers for everyone, improving standards across the board. They would also deliver the skills this country needs, quicker, easier and more efficiently than before.”

Read more from the CBI

CIPP comment

The policy team would value your thoughts and experiences in relation to the comments from the CBI on the apprenticeship levy. If you would care to share, please email us.