Labour Party’s Growth and Skills Levy and Approach to Apprenticeships: UVAC POSITION

Labour Party’s Growth and Skills Levy and Approach to Apprenticeships: UVAC POSITION

UVAC has been reflecting on the recent announcements from the official opposition in parliament and welcomes Labour’s focus on skills. Between 2011 and 2019 there was an 11% real terms fall in employers’ spending on workforce training per employee . Employers must spend more on the training and development of their new and existing employees, if we are to close our productivity gap with our OECD competitors and also compete with emerging economies. Skills and apprenticeship policy must encompass both young people and the existing workforce and focus on the skills needed to raise productivity, support social mobility and workforce diversity, tackle regional inequalities, embrace new technologies and enable the UK to meet the Net Zero/Green Skills agenda.

To ensure the future success of Apprenticeship and when refining its Growth and Skills Levy policy due to be launched this week on 26th October we would ask Labour to provide the following guarantees:

Apprenticeship Budget Guarantee – The Conservative Government budget for apprenticeship is set to rise to £2.7bn by 2024-25 . As a party that believes in skills and apprenticeships, we would ask that Labour make a commitment to match or exceed the current and projected Conservative’s apprenticeship budget. Labour’s current policy to reserve just 50% of Levy funds for apprenticeship could mean an effective cut of up to 50% in the apprenticeship budget. Like other organisations representing those who deliver apprenticeships, including the AELP, UVAC believes that the apprenticeship Levy should remain ring fenced and only be used to fund apprenticeship training and assessment.

In 2019/20 there were 322,500 Apprenticeship starts (a reduction on 2018/19). Levy funding of £2.5bn means funding of £7,763 per Apprenticeship start. Reduce the apprenticeship pot to £1.25bn as Labour proposes and this would mean funding of £3,882 per apprenticeship start. Funding bands for Apprenticeship range from £1,500 to £27,000. Usage of more expensive apprenticeships (and the ones the economy and society really need) is growing rapidly. Would Labour restrict the use of the more expensive apprenticeships the country needs e.g., Degree Apprenticeships for nurses, doctors, police officers, engineers and digital specialists?

Public Sector Apprenticeship Guarantee – Degree Apprenticeships are being used extensively to train the registered nurses, healthcare professionals, social workers and the police officers England needs. We would ask Labour to make a commitment that the NHS, Local Authorities and Police Forces will continue to be able to use their Levy payments to fund and train individuals of any age to become registered nurses, health care professionals, midwifes, social workers, police officers and for other public sector occupations.

SME Apprenticeship Guarantee – Apprenticeship Levy funds not used by levy paying employees are not ‘wasted’ as many claim but are instead used to ensure that apprenticeship funding is available for smaller employers, who do not pay the levy. We would ask that Labour guarantees the existing funding that supports SMEs to use apprenticeship at level 2 to level 7 (including Degree Apprenticeship) to train new and existing employees of any age, for the occupations their organisations need.

Social Mobility Apprenticeship Guarantee – Degree Apprenticeships are being used to develop new progression routes to the professions and higher-level occupations for young people, and existing employees including those aged over 24. The Institute for Apprenticeship and Technical Education (IfATE) has highlighted that ‘Degree Apprenticeships provide opportunities for people from all backgrounds and support social mobility’. We hope that Labour will be ambitious and focus on the use of apprenticeships to provide new pathways to the professions, rather than just concentrate on lower level roles at level 2 and level 3. UVAC would ask Labour to make a commitment that employers could use levy funding for Degree Apprenticeship. This is critical if Apprenticeship is to have a meaningful role in supporting the social mobility and workforce diversity agendas. Degree Apprenticeships are supporting more women and individuals identifying as BAME become police officers. They are opening opportunities for young people and adults, from disadvantaged backgrounds, become engineers, digital specialists, nurses, managers and a vast range of other aspirational roles.

Productivity Apprenticeship Guarantee – The Rt Hon Keir Starmer MP has stated, ‘Labour will give employers new flexibility to invest in the world class training they need’. UVAC believes that employers must be allowed and supported to use Levy payments to develop the skills of their workforces to raise their organisations’ performance and productivity. We would ask that Labour made a commitment that employers will continue to be able to use the Apprenticeship Levy to fund the Apprenticeships their organisations need (at level 2 to level 7), for new and existing employees and for employees of all ages.

Aspirational Guarantee – In 2022 Apprenticeships are, for the first time, in several generations, seen as an aspirational programme rather than a good programme for other people’s children. Degree Apprenticeships are helping to end the academic and vocational divide. Labour must ensure that individuals from ALL backgrounds can access and benefit from apprenticeships. Apprenticeships must not become a programme principally for the disadvantaged. Academic programmes must never be seen as for the ‘advantaged’ and technical, vocational, programmes for the ‘disadvantaged’ and low achievers. We would ask that Labour be ambitious in its apprenticeship policy and focused on developing apprenticeships as a programme for individuals of all abilities and all ages and as a key programme to raise productivity, increase social mobility and deliver the Net Zero/green growth agenda.

Funding Band Guarantee – Funding bands for apprenticeship standards must be based on the actual cost of delivering the training and assessment needed to become occupationally competent. We would ask Labour to guarantee that Apprenticeship funding bands ensure that all Apprenticeships are financially viable to deliver.

Apprenticeships are working BUT could work better. We would ask that Labour:

Provide a Separate Budget for Apprenticeships for Non-Levy Paying Employers – There has been a lack of transparency in how apprenticeships are funded. There has, for many years, been a concern that the more Levy paying employers spend on apprenticeships, the less funding will be available for non-Levy paying employers. This uncertainty could end if a separate budget for apprenticeships for non-Levy paying employers was introduced.

Implement a Degree Apprenticeship Growth Plan – Degree Apprenticeships have a vital role to play in developing the skills employers and individuals need in order to raise productivity, deliver public sector services, enhance social mobility and deliver the net zero/green jobs agenda. Only 20,000 people, however, started Degree Apprenticeship in the 2020/21 academic year. This figure needs to be dramatically increased. UVAC has already contributed to this idea and published its own plan as part of this debate.

Ensure Better Advice is Provided to Young People – We need to increase the number of young people taking Degree Apprenticeships by improving awareness of their benefits and availability among teachers, parents/carers and young people themselves.

Focus on the Contribution Apprenticeship can make to the Net Zero/Green Skills, Energy Security and Cyber Security Agendas – Many apprenticeships that are critical to the successful delivery of the Net Zero/green jobs, energy security and cyber security agendas are at levels 6 and 7. Examples include ecologist, nuclear scientist and nuclear engineer, laboratory scientist and cyber security technical professional. Staggeringly, many in the Further Education sector have argued that Levy funds should not be used for apprenticeships at higher levels and by default, for such roles. Labour should ensure that the apprenticeships the country needs are supported through the Apprenticeship Levy/Growth and Skills Levy.

Growth and Skills Levy – If Labour introduced a wider skills levy we would ask that employers were supported to use funds for quality provision at level 2 to level 7 for employees of any age provided by a training provider, college or university on the basis of what their organisation needed to raise performance and productivity.

Skills England – We would hope Skills England, the new organisation Labour proposes would focus on the skills needed in the economy at all levels, up to and including level 7. As outlined above, level 6 and level 7 skills are critical to raising productivity and delivering high quality public sector services. Skills England, if it is to be a success, must also focus on both young people entering the workforce and lifelong learning. One of the country’s biggest challenges will be raising the skills and performance of those already in the workforce. Poor management skills, are for example, frequently highlighted as a key factor explaining the UK’s poor productivity.

Universities Play a Fundamental Role in Apprenticeship and Skills Delivery – Too often Apprenticeship and skills policy has been seen as synonymous with Further Education. Further Education has a fundamental role to play in Apprenticeship and skills provision, but so does Higher Education. Universities, working with employers, Professional, Statutory and Regulatory Bodies (PSRBs) and regional and local partners, are using apprenticeships to train nursing associates, registered nurses, healthcare professionals, social workers, police constables, engineers, digital specialists and a vast range of other occupations. Skills policy must be about far more than just supporting young people who are deemed ‘not academic’ or have not performed well at school. Skills policy must encompass those entering the workforce and, importantly, the existing workforce. It must include skills at all levels and be about ensuring that individuals, employers and the country as a whole have the skills needed to raise productivity, deliver high quality public services and the net zero/green jobs agenda.

We will be commenting further after the 26th. For a discussion please contact [email protected]