Apprenticeship levy needs to be reformed, says report

13 April 2018 by
Apprenticeship levy needs to be reformed, says report

Apprenticeships have become too complicated for employers and focus on inappropriate training, according to a new report into the government levy, which was introduced 12 months ago.

The findings were among the many conclusions within The Great Training Robbery: assessing the first year of the apprenticeship levy from the public services think-tank Reform.

It said that young, unskilled workers are missing out on the opportunity to undertake apprenticeships as courses are increasingly being targeted at older and more experienced workers. It added that around 40% of low-skill and management training courses have been incorrectly labelled as ‘apprenticeships' to attract millions in government subsidies through the levy.

The government could end up spending £600m on courses from 2019 to 2020 on falsely-labelled ‘apprenticeships', unless reform takes place.

Positions now listed as an apprencticeship include serving customers in a delicatessen or coffee shop, working on a hotel reception desk, and serving food and drink in a restaurant.

The reports said that such low-skill and often very short training courses "do not meet either the historical or international definition of an apprenticeship, yet they can be delivered as an ‘apprenticeship' using funds generated by the levy".

At the same time, the most popular apprenticeship standards now includes training to become a team leader, supervisor or manager, with Cranfield University's School of Management re-designating its existing Executive MBA as an apprenticeship to attract a 90% government subsidy towards the programme costs.

The report recommends that a new internationally benchmarked definition of an apprenticeship is introduced to prevent the misuse of the term by employers and training providers who wish to access government subsidies. It suggests that any apprenticeship that is not able to meet this definition should be withdrawn immediately.

Additionally, the report proposes that the government abandons its target of having three million people start an apprenticeship by 2020 as "it prioritises the quantity of apprenticeships being delivered rather than the need to increase their quality"; reduce the burdens on employers created by the apprenticeship levy, including a new ‘apprenticeship voucher' model for employers to control the available government funding; and get rid of the requirement for 10% per cent of investment from employers towards the cost of training apprentices.

Tom Richmond, senior research fellow at Reform, said: "At present, the apprenticeship levy is too complicated for employers, focused on too many inappropriate forms of training and as a result is unlikely to deliver value for money.

"The government urgently needs to get rid of these poor-quality apprenticeships in order to provide more opportunities for young people to train as genuine apprentices while saving hundreds of millions of pounds in the process."

Apprenticeships: is the system working for you? >>

MAC report says government support is needed to address UK skill shortage >>

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