Good apprenticeships equip people with the skills and experience to help them get a job and get on in work.
That’s why we are fully behind the Government’s ambitious commitment to create three million new apprenticeships by 2020, as we know how critical skills development is for our own workforces, local businesses and residents.
April marks the second anniversary of apprenticeship reforms that have radically changed the way employers manage their skills and training functions, local authorities included.
Reforms included the introduction of the apprenticeship levy, paid by all employers with a pay bill of more than £3 million, and an annual 2.3 per cent apprenticeship target for public bodies’ workforces.
“These changes are vital so we can help more people develop the skills they and our businesses need
Levy allocations are paid on a month-by-month basis, and will expire after 24 months, again on a month-by-month basis, effective from April 2019; so if the levy is not spent, it will be lost.
In March, the National Audit Office used National Apprenticeship Week to launch a report into the impact of the reforms. It revealed a 26 per cent fall in apprenticeship starts between 2015/16 and 2017/18.
The report also showed that many employers are still struggling to spend their apprenticeship levy funds because of the way the policy was designed and implemented. This resulted in an initial underspend. However, growth in higher-level apprenticeships is moving the overall levy budget into an overspend, raising concerns about the system’s sustainability.
To its credit, the Government has started to listen to employers’ concerns and introduced some flexibilities to the levy last year, including enabling levy payers to transfer 25 per cent of their funds to another employer (up from 10 per cent). It also announced a review of the levy, but without a timeline.
The LGA is calling on the Government to make further changes so councils and combined authorities can make apprenticeships work for the local economy, in particular by:
- extending the two-year limit to spend the levy against standards that have only just been approved or are still in development
- pooling of levy contributions to enable more strategic local planning
- using the levy more flexibly to pay the full costs of apprenticeship programmes and administration, including on pre-apprenticeship training
- local areas influencing unspent levy money and non-levy funds.
These changes are vital so we can maximise our council apprenticeship programmes and work with other employers in our communities to help more people develop the skills that they and our businesses need. We look forward to working with the Government and others to ensure the review gives the flexibility we need to make the apprenticeship levy a real success.