Skills minister Robert Halfon has continued to oppose calls for changes to the apprenticeship levy, despite the UK chancellor’s admission that he is “very open” to reforms.
At Treasury questions in the House of Commons last week, Conservative backbencher Luke Evans asked chancellor Jeremy Hunt to “look at red tape around the apprenticeship levy” which he said was making hiring apprenticeships in his constituency “very difficult”.
Hunt replied that he was “very open to reforms on the apprenticeship levy, providing they stick to the fundamental principle that any investment is not within in-house training that would otherwise have happened but is transferable, passport-able training that someone can take with them if they move to another business”.
However, Halfon doubled down in defence of government policy, which he described as focussing on “quality, not just quantity”, in a Westminster Hall debate on the levy this week.
Halfon faced three further fellow Conservatives calling for apprenticeship reforms, including from former ministers. Thérèse Coffey, who was briefly deputy prime minister under Liz Truss and was fired as environment secretary by Rishi Sunak this month, said the “lack of flexibility has been a consistent complaint from many employers”.
Among Coffey’s suggestions was diverting more “surplus” levy funds to small businesses and supply chains.
“The apprenticeship levy was critical in providing a pathway for individuals to realise their potential and for businesses to thrive in that ever-evolving landscape. The regulation and the design of the scheme needs to evolve to keep at pace,” she said.
Level 7 apprenticeships were also in Coffey’s sights. She asked Halfon to carefully look into the issue of firms developing apprenticeships just to use their levy.
“I ask the minister to really interrogate what is happening, particularly with level 7 qualifications. I have heard stories, although I have not actually got the proof to back it up, that the police superintendents’ course had become a level 7 apprenticeship so that police forces could use their levy. That is not really what it was designed for.”
FE Week could find no evidence of a level 7 apprenticeship for police superintendents.
This week’s debate was secured by Stoke-on-Trent North MP Jonathan Gullis, who was briefly minister for schools last year. Gullis currently co-chairs the all-party parliamentary group for apprenticeships and earlier this year published “The New Conservatives’ plan to upskill Britain” along with fellow tory MP, Lia Nici.
Gullis argued that red wall constituencies have “been hit especially hard” by the decline in apprenticeships going to young people and small businesses.
“In northern and coastal constituencies, the number of apprenticeships has fallen, while it has grown in places such as Wimbledon and Chelsea,” he claimed.
Any unspent levy funds should be spent on “training home-grown talent that will help close the skills gap” and the amount levy-paying businesses can transfer to smaller businesses should be increased from 25 per cent to 35 per cent, he argued.
And Conservative MP Peter Aldous, chair of the all-party parliamentary group for further education and lifelong learning, said the levy has been “successful in creating higher-level apprenticeships in larger firms” but reforms were now needed to “provide apprenticeship opportunities for younger people and new labour market entrants.”
Aldous made the case to extend the two-year expiry date for businesses’ levy firms, which he said leads to “rushed financial decisions, rather than strategic workforce development.”
He also argued for an increase to the apprenticeship minimum wage to improve retention and a “flexible approach” to the 12-month minimum duration.
Halfon launches ‘operation machete’
Other than shadow skills minister Seema Malhotra, no other Labour MPs were present for the debate. Halfon admitted the government was “trying” to slash regulation.
“I have a phrase that I use in the department: I call it Operation Machete. I do not like regulation, and there is too much of it. We are doing a huge amount in this area,” he said.
Removing the cap on small business apprenticeship starts, and “significantly reducing” red tape onboarding new apprentices and the new expert provider group were cited as examples.
He also referenced the latest figures on apprenticeship achievement volumes improving by 20 per cent compared to last year. Full-year apprenticeship achievement rates are not due to be published until March 2024.
But he made no commitments or indications on calls from his own side for levy reforms, pointing out that “98 per cent of the apprenticeship budget was spent in the last two years”.He concluded: “Yes, we always have to look at our reforms and make sure things work, and I have listened to everything hon. Members have said in the chamber today. However, it is vital that we give employers and providers the time and stability to deliver gold-standard apprenticeships across even more apprenticeships and that we offer a ladder of opportunity to every young person and to those who want to train and retrain throughout their lives.”
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