The apprenticeship levy should be broadened to a Skills Levy, with greater flex for employers to use their funds for training outside of apprenticeships matched to a maximum of the amount they spend on apprenticeships for young people and capped at up to 50% of the levy. [...] 8 Figure 1: Levy contributions and spending by employers in England8 In recent years, the amount raised by the apprenticeship levy has exceeded the amount allocated to the Department for Education and to the other UK nations. [...] The sharp rise in the following two years is partly related to the ending of Train to Gain (which supported level 2 qualifications in the workplace) – there was some substitution from that to apprenticeships.9 However, since the introduction of the 2017 reforms, the number of apprenticeships has fallen 31%, with the largest falls for young people (-37% for under 19s, -32% for 19–24- year-olds).10. [...] Based on the OBR’s forecasts, and assuming the amount allocated to the Department for Education for apprenticeships rises in line with inflation from 2024-25 onwards, the Government will be raising £1.1 billion more from the levy than it spends on apprenticeships and gives to devolved administrations (the ‘Treasury apprenticeship margin’ – the orange line in the chart) by 2028-29. [...] In this way, the Government could maintain apprenticeship expenditure in real terms, maintain the apprenticeship levy’s net contribution to the public finances, and allow levy payers to spend 15% of their levy payments on qualifications outside of apprenticeships in the three years to 2028-29, raising this thereafter.
Authors
- Pages
- 29
- Published in
- United Kingdom
Table of Contents
- About Learning and Work Institute 2
- Stay informed. Be involved. Keep engaged. Sign up to become a Learning and Work Institute supporter learningandwork.org.uksupporters 2
- Contents 3
- Executive summary 4
- The context 6
- Understanding apprenticeship funding in England 8
- Figure 1 Levy contributions and spending by employers in England 9
- Figure 2 The apprenticeship levy and its allocation between UK nations 9
- Assessing where we are 10
- Figure 3 Apprenticeship starts by age 10
- Figure 4 Apprenticeship starts by level 11
- Geography 11
- Figure 5 Apprenticeship starts per 100000 population 12
- Figure 6 Apprenticeship achievements per 100000 population 19-24s 12
- Figure 7 Proportion of apprenticeships from most and least deprived areas 13
- The difference between levy and non-levy payers 13
- Figure 8 Apprenticeships by level and age for levy and non-levy payers 2223 14
- Figure 9 Change in apprenticeship numbers 201718 to 202223 14
- Has quality improved 15
- The broader picture 16
- Figure 10 Proportion of employed people receiving training at work in the last 13 weeks 17
- A flex match and cap Skills Levy 18
- A more flexible and focused Skills Levy 18
- Phasing in flexibility 19
- Figure 11 Estimated Treasury apprenticeship margin over time 19
- Increasing focus 20
- What would the impact of these changes be 21
- Expanding high-quality apprenticeships 22
- Reviewing the system with social partners 22
- High-quality apprenticeships 22
- Preparing people for a career as well as their current job. 22
- Ensuring training is high quality. 22
- Functional skills 23
- The bigger picture 26
- 1. Widening or increasing the Skills Levy 26
- 2. Introduce a Skills Tax Credit 26
- 3. Better link skills and apprenticeships to local and national growth plans 27
- 4. Introduce a Youth Guarantee 27
- 5. Increase support for lifelong learning and retraining 28
- Conclusions 29
