Apprenticeship Levy Update: Let’s stop rearranging deckchairs and come up with something that actually works

Latest statistics from the Department for Education show that apprenticeship starts continue to fall. 

• In the 12 months to June 2018 a total of 341,700 new apprenticeship were reported
• This compares to 472,500 the previous year
• And 458,500 starts the year before that

Now Chancellor Philip Hammond appears to have made a U turn on the controversial Apprenticeship Levy at this month’s Conservative Party Conference, pledging greater flexibility for firms to decide how the levy is spent.  From next April, firms will be allowed to transfer up to twenty-five per cent of their levy payments to their supply chain, rather than the current ten per cent.

Hudson Contract Managing Director Ian Anfield observes:  “That might sound like a good thing, but it fails to solve two big problems.  Firstly, the money does not return to the employer.   It goes direct to pay college and apprenticeship agents to cover tuition fees, whereas in the past the skills funding agency paid these bills, not employers.  So in real terms the employers get nothing back from their payments and tweaks around the edges will never change that fact.   Incidentally, firms that hire graduates can benefit because levy funds can pay university fees, so some may consider a Higher Level apprenticeship rather than going through uni funded by the bank of mum and dad, but that's just moving one group to another and not creating more training overall.

“Secondly the schemes used by employers have to be approved by the government’s new Apprenticeship Institute. In my opinion, this is yet another self-serving quango whose members think they know better than industry, seem impervious to pressure or scrutiny, and are preventing thousands of places being taken up whilst schemes sit in an approval backlog.

“Apprentices are the future, and particularly in construction.  Instead of rearranging deckchairs, the Chancellor needs to ensure smaller firms can afford to take on extra apprentices, because it’s traditionally these SMEs that actually take on the vast majority of youngsters.  The scheme needs to be rethought, rather than simply amended.”

Meanwhile, Hudson Contract’s own Apprentice Sponsorship Scheme is now in its seventh year, and we are supporting a further thirty apprentices and their employers this academic year.  “We are now at the stage where firms are coming back to us, asking for continued support to expand their apprentice numbers,” Ian Anfield says.  “It’s great to know that such a simple scheme is making a big difference, helping hundreds of youngsters make a career in construction.”  Find out more about our scheme here