Parliamentary concerns about the apprenticeship levy


In February 2016, the Department for Business, Innovation and Skills (BIS) Select Committee produced a highly critical report describing government initiatives for the economy, including its plans to boost apprenticeship numbers, as lacking clear and measurable objectives and of being a “vague collection of existing policies”.


The committee was particularly unimpressed by the plans to boost apprenticeships to three million by 2020. It claimed businesses had not been properly consulted about the apprenticeship levy — including not explaining how sectors that do not use apprentices will be protected — and that the three million target was set “with no consideration for what type of training businesses actually require”.


The BIS report recommended that:


• BIS works across the government to enhance the employability skills that are acquired by school pupils, college and university students by looking to give work experience greater prominence in schools as part of a proper policy on information, advice and guidance;


• the government, in its response to this report, sets out the rationale, and publishes the evidence base, for setting a target of three million apprentice starts when that may run against what businesses actually require;


• the government works with businesses and individual sectors to make a preliminary assessment of how the three million apprenticeships will be broken down by level and publishes the result of this work;


• the government consults with industry to ensure that the apprenticeship levy is implemented in such a way as to allow sectors to invest in skills through different qualifications and training methods applicable to their specific needs; and


• the government does more to balance the perception of the benefits of college and vocational education against those of higher education, and does more to promote both as attractive career paths and as good drivers of productivity.


The BIS report also expressed concerns that there could be a policy trade-off between the government achieving the three million apprenticeships target and the maintenance of apprenticeship quality. It said: “We believe that the government is right to resist this temptation and will continue to keep a close eye on this part of skills policy.”


In an interview with FE Week magazine in February 2016, BIS Select Committee chair Labour MP Iain Wright, expressed serious concerns about the government’s policies and plans. “Seven months after the plan when the apprenticeship levy is mentioned, businesses, colleges and students have no idea how the apprenticeship system is going to work in the future. Throughout the Productivity plan (see page 3) there is no real attention given to implementation,” he said.


Wright added that: “We’re still no further forward really in terms of how the levy will be implemented. There’s too much uncertainty for everyone involved. It is running ominously late for all these details and it does demonstrate a worrying lack of consultation with the real interested parties.”


When asked about whether target setting for apprenticeships should be completed in collaboration with employers, with staggered targets for different sized employers, Wright said: “The short answer is yes. We applaud what the government is doing, by ensuring there is a target that should focus minds. But where did this three million target come from. He added that: “There was no consultation with business on what business and sectoral needs were whatsoever.”


Asked if he thought employers had enough time to be able to prepare and make necessary changes to be in control of this situation, Wright said: “There isn’t long. Time is running out. For [the levy] to be up and running by April 2017 seems an astonishingly short time period, given the degree of uncertainty we’ve got at the moment.” Liz Rees, director of unionlearn, said: "It is welcome that the Select Committee attributes such importance to skills in its critique of the government’s policy approach on improving productivity."