Building consensus will be crucial to the growth and skills levy’s success

Creating a clear sense of purpose will be an important first step in ensuring the reformed levy delivers the skills transformation we need

Creating a clear sense of purpose will be an important first step in ensuring the reformed levy delivers the skills transformation we need

14 Sep 2024, 5:00

Eight years ago, as a special advisor in Number 10, I took representations – positive and negative – from businesses on the incoming apprenticeship levy we were about to introduce. This week, at Multiverse, we asked 1,405 employers for their perspectives on the levy and how it should change.

We are no closer to consensus. Words like ‘bureaucratic’, ‘limiting’ and ‘outdated’ came up as frequently as ‘clear’, ‘opportunity’ and ‘beneficial’. Perhaps the response that best sums it up? ‘Untapped potential’.

The challenge for the apprenticeship levy was that in addition to the complexities of the policy, its purpose was always multifaceted and up for debate.

The additional wages generated by apprenticeships may have risen by 44 per cent while the graduate premium has fallen, but the initial reduction in starts is easy ammunition for sceptics.

The many indicators of quality improvements should be applauded, but we should look seriously at what it takes to restore apprenticeships at SMEs and in the trades.

In short, this is not a debate that lends itself to easy conclusions.

The definitional challenge is one that the new government should look to solve. Indeed, they already have. Introducing a growth and skills levy is more than just a re-brand. It is a clear and conscious signal that the chief priority for the new policy should be the cause of economic growth.

As a new NFER report revealed this week, the nature of work and business is undergoing a radical transformation. Skills are the means of safeguarding individuals and their employers amid this transformation.

Apprenticeships, driven by the current skills needs of employers and solved through combining work and learning, ought to be the natural solution – if they can be made to work.

Recent polling commissioned by Multiverse and conducted by Public First shows a strong public appetite for making training more flexible. Eighty per cent said they would be more likely to take a course if it could be completed in stages, and 74 per cent preferred courses that could be completed in less than 12 months.

Flexibility alone is not going to solve the growth conundrum

Employers, too, often desire more flexibility. Being able to spend a portion of the growth and skills levy on non-apprenticeship training would support these calls. As would the ability to undertake training in smaller, more manageable chunks. This would make it easier for individuals to upskill or reskill while balancing their other responsibilities.

However, flexibility alone is not going to solve the growth conundrum. It requires clear guardrails and growth-orientated purpose.

The growth and skills levy should make high-quality training accessible to everyone, regardless of location. Like the apprenticeship levy, there should be a national approach to avoid a postcode lottery where some areas receive better support than others.

Many large UK employers already struggle to offer apprenticeship programmes to colleagues in Scotland or Northern Ireland. Adding in further complexity in the English regions would be a step backwards.

To be successful, the system should remain employer-led. Employers are best placed to identify the skills gaps within their organisations and select the training to deliver the greatest return on investment. This approach would mean the skills people develop are closely aligned with the economy’s demands.

The new levy should also guarantee high-quality provision. This means maintaining rigorous standards for training providers so that investment in skills training delivers value for money.

Precise levels of regulation should be appropriate to the courses being provided too. Shorter courses, for example, may not require the same level of inspection and end-point assessment as multi-year apprenticeships, but the presumption should be that quality matters.

Implementing these reforms will not be without challenges. Their success will depend on careful design and execution, with input from employers, workers, and policymakers. And the whole sector will have a role to play in demonstrating where and how learners can benefit from new forms of training.

This moment represents a significant opportunity to reshape skills in the UK and meet the pressures and opportunities fast-moving technologies represent, and an opportunity for the training sector and providers too.

With proactive engagement and optimism about policy change, we can help ensure the skills ecosystem is finally, rightfully seen as the engine room of sustainable, longer-term economic growth.

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