Pre-apprenticeship traineeship courses could see a return under a Labour government, despite the Conservative government recently scrapping a similar scheme due to low take-up.
New training courses for young people would be funded by employers through Labour’s growth and skills levy, a replacement to the apprenticeship levy introduced by the Conservatives in 2017, the party has announced.
Labour announced it would replace the apprenticeship levy with a more flexible alternative in September 2022. Under Labour’s levy plans, employers would spend at least 50 per cent of their levy funds on apprenticeships but could spend the rest on other types of training.
This is in contrast to the current apprenticeship levy where funds can only be spent on apprenticeships.
Labour claims three per cent of funds from the skills and growth levy would fund 150,000 traineeships for young people in sectors such as digital, construction and electrical.
It’s unclear how Labour’s proposed version of traineeships differs from the one the Conservatives introduced and then later scrapped due to low take-up.
Today’s announcement doesn’t detail who would be eligible for new traineeships or how much of the programme would be delivered by employers or training providers.
Based on three per cent of the current levy bringing in around £100 million, the Institute for Fiscal Studies estimated each Labour traineeship would cost around £750, about the same as a functional skills qualification.
The Conservatives canned the traineeship programme in August after achieving just a third of its recruitment target, despite being funded at around three times the per-head rate Labour has proposed.
Business could also spend their levy on non-apprenticeship training for existing workers, including modular courses in “new industries and technologies” identified in local skills improvement plans, Labour re-announced today.
Bridget Phillipson, the shadow education secretary, said: “Businesses are crying out for help to tackle skills shortages, so Labour will give them the flexibility needed to create skills training opportunities and drive economic growth through a growth and skills levy.”
Labour claimed its more flexible levy would also reverse the decline in adults in training under the Conservatives.
Opposition ministers have been asking businesses to sign a letter of support for their new growth and skills levy, according to reports.
“The choice on July 4 is between a Conservative Party that has given up on upskilling the nation and Labour that will see in a golden age in lifelong learning so that everyone can get on and fire the growth our economy needs,” Phillipson said.
Small business questions
This comes days after the Conservatives pledged £900 million to create 100,000 more apprenticeships by the end of the next parliament if it wins the general election on July 4.
Labour has previously defended its growth and skills levy plans amid criticism from training leaders worried it would devalue and reduce apprenticeships.
Apprenticeships in small and medium-sized businesses (SMEs) are currently paid for from levy funds businesses pay in but don’t draw down for their own apprenticeships.
Business and sector leaders have raised concerns that by encouraging businesses to spend more of the levy on non-apprenticeship training, there wouldn’t be the unspent funds available to spend on apprenticeships in small businesses.
In June 2023, then shadow skills minister Toby Perkins said he’d won a commitment from Labour’s treasury team for a ringfenced budget to protect funding for SME apprenticeships.
However, shadow education ministers have dodged questions on this and there’s been no mention of such a dedicated budget since.
Conservative ministers claim Labour’s levy plans would half the number of apprenticeships available.
In a new report last week, Learning and Work Institute estimated low skills levels was costing the economy £20 billion a year amid declining investment in training from government and employers.
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