Leveraging the Levy

The National Federation of Builders has launched a policy paper, entitled ‘Leveraging the Levy’ calling for reform of the Apprenticeship Levy to improve the performance of apprenticeship skills and training delivery.

The paper, authored by the Major Contractors Group of the NFB, is a response to the then Prime Minister’s challenge at the Spring Statement in 2022 where he urged the need to review the current business tax system, including the Apprenticeship Levy, to ‘incentive businesses to invest in the right kinds of training’. The current PM reasserted a commitment in his New Year’s speech of January 2023, stating he wanted to see ‘more technical education, lifelong learning and apprenticeships’.

 

Plenty of money

As of July 2022, over £3.3bn of unspent Apprenticeship Levy funds have been returned to the exchequer for general expenditure. National Federation of Builders (NFB) major contractors have reported numerous issues with the system, ranging from frustration at the lack of training options available, poor quality and sparse apprenticeship provision, funding rules that are too rigid and a mismatch between the number of apprentices needed to recover funding when compared to the business’ supervisory capacity to oversee them.

 

Ten reforms

The paper therefore proposes ten reforms, covering five priority areas, that aim to allow greater use of Apprenticeship Levy funds by the company themselves and others in the sector; a reduction in ‘lost’ funding; an increase in investment in learning, skills, and training overall;l and an increase in apprenticeships:

  • Widening the Levy’s scope to become an apprenticeship, skills and learning levy.

  • Reforming funding rules to allow greater expenditure to support apprentices.

  • Relevelling the Levy to match employer’s capability to spend and the system’s capability to provide apprenticeships.

  • Improving Levy transfer to retain funds for much wider use by other companies in the sector and preventing the return of over £3.3bn of unspent funds to the exchequer.

  • Addressing double pay to tackle the issue of CITB and Apprenticeship Levy overlap.

 

 “A not-fit-for-purpose Apprentice Levy hurts in an industry which operates on the narrowest of margins as it is. I urge the government to take note of and implement the comprehensive recommendations contained in our report, in order to make the Apprentice Levy a training tool we can all be proud to use.”

– Herman Kok 

Chair, NFB Apprenticeship Levy Working Group

 

Issue with the system

James M. Butcher, NFB director of policy says: “We accept that the Covid-era of big funding is over. But with low growth prospects, a major skills shortage, the need for greater productivity and greater investment in technical and vocational skills, we must seek to make the existing policy levers work better. By anyone’s calculation, the loss of over £3.3bn of Apprenticeship Levy funds indicates a major issue with the system – we have to use that money smarter. With a few minor reforms, we can really get the Apprenticeship Levy system firing on all cylinders and rise to the PM’s challenge of increasing business investment in skills.”

 

Picture: The National Federation of Builders is asking for a reform of the Apprenticeship Levy so that funds are better spent.

www.builders.org.uk/policy/campaigns/apprenticeship-levy

 

Article written by Cathryn Ellis
22nd February 2023

Share



Related Articles