• International Workplace
  • 11 February 2019

Government need to address barriers to apprenticeship levy

Employers want greater flexibility in how they can spend their apprenticeship levy funds, with the current ‘one-size fits all’ approach limiting uptake and investment, according to new research by City & Guilds Group.

Ahead of the planned consultation with businesses and others involved in apprenticeships, City & Guilds Group is calling on government to really listen to employers and help remove barriers to enable businesses to make full use of apprenticeships as the vital skills solution they are intended to be.

Within its report, Flex for Success, which also incorporates the views of employers, City & Guilds Group makes the following recommendations:

  1. Government should provide more clarity about the amount of levy that has been spent and the amount that will be taken out in April 2019 so that everyone involved in delivering apprenticeships and benefitting from them is able to plan effectively.
  2. Building on the Find an Apprenticeship service, government should commit that a proportion of any surplus levy is invested centrally to support recruitment and promotion of opportunities.
  3. Government should reward organisations that invest in apprenticeships with the option to use levy funding to provide recognised qualifications that support progression in the workplace, helping to plug current and future skills gaps.
  4. Government must make better use of data to understand apprenticeship trends across company sector and size and should consider adopting a flexible approach to different industries in the requirements for using the levy to support their individual skills challenges. e.g. introducing a co-funding model for more expensive apprenticeships in sectors such as aviation and engineering.
  5. Government should support employers in accessing advice and funding to help with recruitment and development that is not currently funded through the levy e.g the Adult Education Budget, adult learner loans and the National Retraining Scheme.
  6. There needs to be a review of the online Apprenticeship Service to make it easier for employers of all sizes to engage with the system and consider any associated rules that make it impossible to access the system in more flexible ways.
  7. The Institute for Apprenticeships must introduce and/or approve End Point Assessments (EPA) as a matter of urgency for all live apprenticeship standards.
  8. Government, working with employers and training providers should look to broaden the appeal of apprenticeships, through promoting the benefits to parents and teachers, investing more time in outreach with local schools and colleges. This would include putting clearer progression pathways in place to allow would-be apprentices to understand the longer-term career progression opportunities from undertaking an apprenticeship.
  9. Colleges, training providers and universities must work more closely with employers to better understand and meet their training needs and agree ways that these can be met at a macro level.
  10. Government should introduce a further extension to the amount (currently 10% rising to 25% in April 2019) of levy that employers can invest in their supply chain and make it clear to all employers that this money can be spent with any SME.
  11. Government should allow SMEs to pool their funding for scale to increase their buying power and allow them to access high quality apprenticeship provision on the same terms as larger employers. Government could consider looking to GTA models as a way to spread risk.
  12. Government should create an independent skills body that is able to hold government to account on its skills policy, tracking the success measures of each skills intervention against pre-agreed objectives.


Says Kirstie Donnelly, Managing Director at City & Guilds Group:

“The turmoil we are facing, as a result of uncertainty around Brexit as well as the rapidly changing world we live in, means that it’s never been more urgent to improve the skills of our workforce and invest in home-growing the skills that we may no longer be able to import from abroad. Apprenticeships have a huge potential to deliver on this, but the system is still not responsive enough to the needs of employers. Businesses need more flexibility to use the apprenticeship levy in a way that will truly help them fill skills gaps, upskill their workforce and shore up their talent pipeline for the future.

“Flexibility alone isn’t enough. The government must provide greater clarity on apprenticeship data in order to equip the industry with the holistic view it needs and enable employers to understand its wider impact. Although we welcome the government’s commitment to introduce reforms, they are yet to set this in motion. We have set out a list of twelve recommendations, eleven of which are for the government to act on, as we urge them to prioritise apprenticeships, maintain momentum and make better use of data to help all those involved to create the skilled and productive workforce we so desperately need.”