Level Up The Levy

Former Education and Skills Ministers call on Chancellor for an ‘Apprenticeship Levy 2.0’ to Level Up Britain.

Former Education Secretary Justine Greening and former Skills Minister Anne Milton are calling on the Chancellor, Jeremy Hunt, to review and update the Apprenticeship Levy as part of the Government’s national mission to level up Britain.

In a letter co-signed by employers and key stakeholders from across the UK, the former ministers, who oversaw introduction of the Apprenticeship Levy in 2017, call on the Chancellor to commission a formal review into the operation of the levy as part of next week’s Spring Budget.

Speaking about the need for reform, former Education Secretary Justine Greening said:

“When I introduced the Apprenticeship Levy in 2017 its overriding objectives were driving improved social mobility through better quality skills education and tackling Britain’s skills shortages, which were acute even then. The introduction of the Apprenticeship Levy in 2017 was a hugely positive step which has enabled many apprenticeship opportunities nationwide but five years on and with billions of levy going unspent by employers, there’s a risk that without serious reform the levy doesn’t level up Britain in the way we intended. We know there are solutions that could make a dramatic difference to apprenticeships and skills opportunities for people around the country. That is why we are calling on the Chancellor to commission a review and reform the Apprenticeship Levy so that it is as effective as possible in supporting levelling up.”

Former Skills Minister Anne Milton said:

“Five years on from the introduction of the Apprenticeship Levy, now is the right time to review how it is structured and make sure the operation of the levy is properly aligned with the drive to level up our country. We need, in effect, an Apprenticeship 2.0, and I hope the Chancellor will take the opportunity presented by next week’s Budget to fire the starting gun on this process.” 

Shirine Khoury-Haq, Chief Executive Officer at the Co-Operative Group, said:

“Apprenticeships are one of the best tools we have to promote social mobility, but the levy as currently designed holds us back. A structured review by Government could empower more employers to offer apprenticeships to those who would most benefit. At the Co-op we’re already working to create apprenticeship opportunities for disadvantaged individuals and communities – we do this by working with other employers to pool and redistribute unspent levy funds. If the cap on redistribution of unspent levy funds were to be increased from 25% to 40% with increased flexibility on how the levy can be used, we could deliver even more of these opportunities.”

Steven Cooper, CEO of Aldermore Bank, said:

“Apprenticeships play a crucial role in helping to improve social mobility across the country, but they also present companies with a great opportunity to tap into a pool of talented people that they may otherwise have missed out on. Our business has benefited enormously from the fresh perspectives and new ideas that our apprentices have brought, but it’s clear that many companies are not taking advantage of apprenticeship schemes in their own organisation. Now is the time to look at this area again with a fresh pair of eyes and figure out how we can make apprenticeship schemes work better for apprentices and companies.”

Clive Higgins, Chair and CEO ad interim of Leonardo UK, said:

“The premise of the levy is the right one but it is time to consider how it can be used to address the issues facing employers and the workforce today. By rethinking how the levy is deployed, we have the opportunity to see the levy benefit education, the up-skilling of our employees, and companies within our supply chain, particularly SMEs. I believe with a little more flexibility on how the money from the levy is spent, that there is a real opportunity to bring dividends for the future.”

In the letter (full text below) the former ministers and co-signatories propose that a review of the Apprenticeship Levy could look at ‘pro-levelling up steps and removing some of the barriers, for example on prior educational attainment, particularly with regard to maths. It could consider how employers can work together to pool funds on collective skills challenges that are also a chance to extend opportunities to underserved people and communities. A modular approach alongside the ability to invest in wider employability skills alongside apprenticeship training would represent a welcome change.’

For the Government, a review could also provide a chance to align with its Lifelong Learning Entitlement policy as it further develops, ‘whilst also enabling a holistic approach to looking at different requests for more flexibility on what can constitute levy spend.’

Co-signatories to the letter to the Chancellor include Aldermore Group, Leonardo UK Ltd, Pertemps Network Group, Sodexo, Tarmac, The Adecco Group, The Co-operative Group, Travelodge and Virgin Money.

For more details contact matthew@socialmobilitypledge.org / 07540064048