The UK government has unveiled plans to replace the Apprenticeship Levy with the Growth and Skills Levy, aimed at increasing flexibility and addressing skills shortages.
- The new levy allows for funding of shorter apprenticeships, enhancing training flexibility for learners and employers compared to the previous system.
- Employers are encouraged to invest more in younger workers, with businesses funding more of their level 7 apprenticeships outside the levy.
- RHA welcomes the reform, highlighting potential career opportunities and pathways for road transport and logistics.
- Skills England reports a decline in employer investment in training, reinforcing the need for reforms, as noted by industry leaders.
The UK government has announced a significant shift in its approach to vocational training, introducing the Growth and Skills Levy to replace the existing Apprenticeship Levy. This change is designed to introduce a greater level of flexibility in apprenticeship funding, addressing prevalent skills shortages. Under the revised system, apprenticeships will no longer be required to last a minimum of 12 months, providing learners and employers with enhanced flexibility over their training programs.
The new levy framework encourages employers to shift their apprenticeship funding priorities. Specifically, it asks businesses to invest more substantially in training younger employees, while mandating that level 7 apprenticeships—equivalent to a master’s degree—are funded outside of the levy. This move is intended to rebalance the skills investment landscape, particularly as it pertains to older or more qualified employees.
Richard Smith, Managing Director of the RHA, expressed support for the reform. “We’ve long campaigned for reform of the Apprenticeship Levy,” he stated, underscoring the disadvantages firms faced under the previous system. He sees this as an opportunity to unlock new career pathways in road transport and logistics, advocating for a focus on quality technical education.
Sally Gilson, RHA skills policy lead, further highlighted the need for such reforms, citing a report from Skills England which indicates a steady decline in employer investment in training over the past decade. This decline has contributed to the lowest recorded training expenditure since 2011, with investment per employee decreasing by 19% in real terms. The report aligns with RHA’s previous calls for a more flexible and responsive skills funding system.
Logistics UK, another prominent industry voice, has echoed these sentiments, calling for a substantial overhaul of the UK’s apprenticeship system. They argue that enabling businesses who contribute regularly to the levy to train new recruits with these funds is essential. The suggestions point towards a system that is more in tune with current industry needs and able to address critical skills shortages effectively.
The introduction of the Growth and Skills Levy marks a pivotal step in reshaping the UK’s vocational training landscape, promising greater flexibility and addressing critical skill deficiencies.
