Major reform package announced by the PM to boost apprenticeships – but does it go far enough?

On face value, this announcement from Number 10 (post the Spring Budget) reads as positive news with c.£60m new investment which will enable up to 20,000 more apprenticeships, including for young people and small businesses.

The government committed to fully fund apprenticeships in small businesses from 1^st April by paying the full cost of training for anyone up to the age of 21 – reducing costs and burdens for businesses and delivering more opportunities for young people to kick start their careers. This removes the need for small employers to meet some of the costs of training and saves time and costs for providers who currently need to source funding separately from the government and businesses.

This is presented as an additional £60m new government funding for next year, guaranteeing that, where there is demand, government will ensure there is enough funding to deliver them.

In addition, more flexibility has been announced to enable levy-paying employers to pass on up to 50% of their fund to support other businesses, an increase from the previous 25% which will help SME’s hire more apprentices by reducing costs and unlock more opportunities for young people.

£35.39m of levy funding has been pledged since Sept 2021 by hundreds of large employers to support apprenticeships in businesses of all sizes. The commitment from government would increase the funding for apprenticeships to over £2.7B from next year.

Sounds good? But there are a few questions to consider if the commitment and policy intent will achieve the results that are needed.

Firstly, it is worth noting that the commitment from government to fully fund apprenticeships with SME’s only covers apprentices up to the age of 21. Perhaps a cynical view would be that the existing apprenticeship levy is failing young people, with numbers in apprenticeships now far lower than when the levy was introduced in 2017. The targeted funding for apprentices up to the age of 21 will only make a modest difference.

Simon Ashworth, Director of Policy, Association of  Employment and Learning Providers, commented in FE News that AELP would like to see the end to co-funding for all-age apprenticeships, not just young people; a sentiment shared by a number of other bodies. In other words, a step in the right direction but is it really ambitious or bold enough to make it count? It is also worth noting that the Treasury reports figures far higher for levy receipts than the allocation coupled with payments back from DfE due to underspend.

The West Midlands has a high proportion of SME’s who could take advantage of the new flexibilities but making sure they have access to the right information and support to navigate the system will be critical to ensure the practicalities are easy to navigate.

Some further questions to consider:

• What do young people think, and how are they being connected to apprenticeship opportunities? With a growing challenge of youth economic inactivity, what more needs to be done to get the buy in of young people to engage. With UCAS now providing information and advice on school leaver apprenticeships, hopefully this will help to bridge the gap between young people and employers.

• Whilst no-one can argue the value of apprenticeships, is more flexibility needed in how levy funds are being used? If we look at sector-specific skill shortages and gaps, a question exists – is an apprenticeship always the right answer? Flexibility in being able to deliver more targeted, short, sharp skills training may be more impactful in getting the buy in of young people and for employers to see training as a route to tackle skills shortages and improve productivity more quickly.

In summary, the move to have more flexibility in apprenticeship funding looks to be good news, but it would seem a bit of a stretch to badge this as new money and the scale of impact will be limited due to the age restrictions. Perhaps in the run up to a new election, the main parties will start to make bolder, more impactful commitments about how we ensure people of all ages have the skills to thrive in the communities they live, and to boost economic productivity at national and regional level.

As a thinktank, we strive to understand the voice of SME’s – how they can maximise the opportunity to play their part in “creating a better West Midlands” and the voice of young people.  How can this demographic engage with SME employers to tap into the new supposed raft of apprenticeship opportunities this will create.

ABOUT OUR AUTHOR:

After eight years working in the third sector, Di created EmployabilityUK – an education charity. EmployabilityUK has an impressive track record with nine years of delivering first class employability skills to young people from all backgrounds. As a volunteer-led charity, EmployabilityUK was honoured to receive the Queen’s Award for Voluntary Service in 2021.

In her previous role, Di was responsible for developing Career Academies UK’s strategy and delivering the national programme. After building a team of regional managers and taking the programme to all parts of the UK she then went on to become Director of Business Development.

Di has more than 25 years of corporate business experience from BT and O2, including delivering BT’s education and community programmes. Di has held several volunteering roles including 6 years as a Special Constable with West Midlands Police. She has served on a number of boards and committees including EBP’s, University Business Schools, GBCCC and a multi-academy trust. Until recently Di was an independent Parish Councillor. Di’s commitment to advancing the opportunities for young people was recognised in the Queen’s Platinum Jubilee Honours, when she was awarded an MBE.

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