The story so far
Back in April 2017, the government introduced the Apprenticeship Levy, a scheme designed to create long term sustainable funding for apprenticeships and give employers control over training provision.
The goal was to create 600,000 new starts per year, yet the average has been a little over 300,000. At the same time, £3.3bn has been returned to the treasury under the levy’s ‘use it or lose it’ policy.
One of the aims of the Apprenticeship Levy was to boost new starts in socially disadvantaged groups. The figures though, tell a different story: the number of young people from deprived areas starting apprenticeships fell from 250,000 in 2015/206 to 150,000 in 2022/2023. Meanwhile, higher-level and degree-type apprenticeship starts more than tripled in the same period.
What might change?
Conservatives
The Conservative Party have pledged to create 100,000 more apprenticeships per year through the scrapping of ‘low value’ degrees, which they say offer poor value for money. This would save the taxpayer £910m over a ten-year period.
Critics of the plan say that it is unreasonable to attach a price to each degree, since relatively low paying jobs often have a positive effect on society. At the same time, universities argue the plan could damage the creative sector and reduce access to the arts.
In response, the party has said that it would strengthen apprenticeship provision in certain creative sectors including film, television, gaming and music.
Labour
The Labour Party proposes to transform the current Apprenticeship Levy into a ‘growth and skills’ levy, giving employers the option to spend up to 50% of their contributions on non-apprenticeship training. The levy would also be used for functional skills and pre-apprenticeship training.
Under the current system, up to 50% of unused contributions are able to be transferred to Small and Medium Enterprises (SMEs), enabling them to hire more apprentices. While Labour have not yet been clear on whether this will continue if they are elected on July 4, the party has given assurances that SMEs will not see a reduction in available funding.
Labour has further announced the creation of Skills England, a new body that will set out an approved list of qualifications under their ‘flexible levy’ proposal. The list will prioritise industry-specific modular courses including digital skills, social care, and childcare.
Liberal Democrats
The Liberal Democrat manifesto outlines plans to replace the Apprenticeship Levy, which, like Labour, would allow for more flexibility in how contributions are spent. The new levy would run alongside lifelong education and training grants for adults.
The party aims to encourage new starts by raising the lower apprentice hourly rate to bring it inline with the national minimal wage. This would also improve course completion rates – year 2021-2022 saw dropout rates of 35% in manufacturing, 52% in health and social care, and 76% in medicine and dentistry.
Further manifesto plans see the party increase funding per college learner above the rate of inflation, invest in a young person’s premium for disadvantaged learners aged 16-18, and fix and replace college buildings in disrepair.
Getting ready
Whover is handed the keys to number 10 on July 4, change to the landscape of apprenticeship provision is almost certain. Whether this change begins ‘on day one’ remains to be seen, but organisations would do well to prepare as best they can.
As part of this preparation, providers should ensure they have the flexibility to cope with whatever new guidance and regulation comes their way. They can do this, in part, by having the right digital systems in place.
These systems should be agile enough to cope with change as it happens. Platforms such as Learner Management System (LMS) for example, are consistently updated, ensuring compliance with ESFA funding. Additionally, optimised systems should be hosted in the cloud for maximum efficiency and security, and receive ongoing support from your technology partner.
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