Given the expected drop in new apprenticeship starts tomorrow, and the fact that around 90 percent of the levy remains unspent, the City & Guilds Group has called upon Government to listen to employers by allowing more flexibility in how the apprenticeship levy is spent. This is vital to ensure apprenticeships remain a viable skills solution for businesses. Contributor Kirstie Donnelly MBE, Managing Director – City & Guilds and ILM
Kirstie Donnelly MBE, Managing Director of City & Guilds and ILM, said: “We are fully supportive of the new apprenticeship system as a tool to enable career progression at all levels and to help employers fill skills gaps and shortages. And of course, we must not write-off a new system with so much potential before it has had the chance to get established. However, we equally cannot ignore the signs that the system as it is currently structured clearly isn’t working for many employers.
“We believe more must be done by Government now to inject some momentum back into apprenticeships and build confidence in a skills system that provides high-quality technical pathways and creates a better-skilled workforce. We have heard from employers and employer bodies that they would welcome increased flexibility in how the apprenticeship levy is used. It is critical that Government listens to their voices now if the system is to succeed in the future.
“We believe that unless steps are taken to directly address this issue now, we will never be able to reduce the skills gaps and skills shortages faced by so many UK industries.” Earlier this week, the City & Guilds Group launched People Power, a piece of research which polled 1,000 employers on their views of skills gaps and shortages in the UK economy. The research found that 9/10 employers suffer with skills gaps which hamper their productivity and ability to grow.
The research also highlighted the positive impact that effective skills development activity could have on UK business, and that employer support for apprenticeships in principle is relatively strong. However, it also demonstrated that significant barriers needed to be overcome to address the skills crisis in the UK and that there is a general lack of engagement with Government skills polices and interventions amongst employers.
Kirstie Donnelly continued: “A one-size-fits-all solution simply doesn’t work for employers. We need to see much better analysis of the figures to understand which sectors in particular are struggling with the current system and where the drops in starts are coming from. With that understanding the Government can then look at interventions for specific sectors and types of apprenticeships where more support is needed.”
The City & Guilds Group suggested several possible interventions to build a better functioning apprenticeships system. These included: allowing more flexibility in how the levy is spent to encourage greater employer engagement in the system removing the 10 percent charge for SMEs given that wages and support costs have to be met considering an extension for funds to be used to take into account the fact that it is an entirely new system that needs time to bed in
Kirstie Donnelly concluded: “Government would benefit from demonstrating strong decisive leadership to resolve the issues now, which in turn would result in increased confidence, take up and engagement from employers and an increased number of apprentices.”