Apprenticeship Levy and Workplace Opportunities for Young People

On 4 July, the House of Lords is due to debate a motion moved by Lord Young of Norwood Green (Labour) that “this House takes note of the apprenticeship levy and the case for the effective delivery of workplace opportunities for young people”.

Apprenticeships have been identified as a means of improving skills in the UK workforce and increasing productivity. Both the current Government and previous governments have sought to increase the number of apprenticeships and improve standards. In 2015, the Conservative Government, then led by David Cameron, announced it would support 3 million new apprenticeship starts by 2020. Since then, the Government has made a number of reforms to the apprenticeship system in England. This has included the gradual replacement of apprenticeship frameworks with apprenticeship standards. Apprenticeship standards were first introduced under the Coalition Government. They are intended to be more occupation-focused and more responsive to the needs of employers.

In April 2017, the Government introduced the apprenticeship levy. The apprenticeship levy is paid by employers across the UK with a pay-bill of over £3 million each year. The purpose of the apprenticeship levy is to provide financial support for the increase in the number of apprenticeships. Funds from the levy can be accessed by both levy payers and by smaller employers who do not pay the levy.

There has been some criticism of the Government’s apprenticeship programme and the way it has been implemented. The House of Commons Education Committee, Public Accounts Committee, the Opposition and the Liberal Democrats have all called for the system to be reformed. Critics of the levy have highlighted: an initial lack of take-up in the scheme; too much emphasis on the total number of apprenticeship starts, at the expense of quality; the rules to access levy funds being overly complex and inflexible; and that it does not do enough to support small and medium sized enterprises.

The Government has defended its apprenticeship programme. It has argued there has been an increase in the take up of apprenticeship standards since the introduction of the levy. It has also said it would review the apprenticeship levy and look for ways to ensure funding was spent more effectively.