Why the Apprenticeship Levy Must Do Better: Balancing Upskilling and Supporting the Next Generation

Yesterday's article by Libby Purves in The Times (https://www.thetimes.com/comment/columnists/article/apprenticeship-scam-is-cheating-our-young-cz68ktx5b) raises important concerns about the apprenticeship levy and its current shortcomings. While the levy was introduced to address skills shortages and provide opportunities for young people, it’s clear that significant reforms are needed to ensure it fulfils its original purpose.

Upskilling existing staff through apprenticeships can be an excellent use of levy funds when there is a genuine need. It strengthens businesses, addresses skills gaps, and fosters loyalty within teams. However, we cannot ignore the growing number of young people who are not in education, employment, or training (NEETs). While apprenticeships were originally designed to provide individuals with pathways to meaningful careers, they also have the potential to be an excellent solution for addressing NEET employment. However, it’s concerning that this is often overshadowed in the current system.

Through my work with the British Institute of Kitchen, Bedroom & Bathroom Installation (BiKBBI), I’ve become acutely aware of the specific challenges faced by trades businesses when it comes to apprenticeships. For small and medium-sized companies in trades like plumbing, carpentry and electrical work, the costs and risks of taking on apprentices are significant. The current employer grants fail to adequately address these barriers, leaving many smaller companies feeling excluded from the system. This is particularly troubling as trades businesses are critical to addressing the UK’s growing skills shortages.

The levy system needs reform to ensure a balance between upskilling and supporting the next generation. Potential solutions could include:

• Increasing employer grants for smaller businesses in trades to offset the financial risk.
• Introducing measures to ensure a significant portion of levy funds are ringfenced for new entrants to the workforce.
• Simplifying the process for small businesses to access and use levy funds.

If England is to address its skills shortages and secure its future, we need to invest in both the development of new talent and the upskilling of existing staff. Apprenticeships have the potential to bridge this gap, but without meaningful reform, the system risks leaving young people and small businesses behind.

There needs to be a balance that works for everyone: businesses, young people, and the nation as a whole. What do you think? How can we improve the apprenticeship system to better support the next generation and the businesses that hire them?