‘Limited demand for level three apprenticeships from businesses could lead to levy resistance’ – new joint select committee research claims

Limited demand for level three apprenticeship skills among UK businesses could lead to “resistance” to the proposed large employers’ levy, according to joint House of Commons select committee research out today.

Business, Innovation and Skills committee chair Iain Wright (pictured above left) and his Education committee counterpart Neil Carmichael (pictured above right) commissioned the research, which claims that “considerable challenges lie ahead to design such a levy”.

A 38-page report, featuring research from the National Institute of Economic and Social Research (NIESR), compares education and training in the UK, United States, France and Germany.

It looked at the issue of the proposed large employers’ apprenticeship levy, among others, for which a government consultation closed on October 2, and concluded that “employer commitment to apprentice training in the UK continues to be limited by comparison with Germany and some other Continental European nations”.

It adds: “In large part this reflects the business strategies deployed by many British firms which do not seek to specialise in high skill, high value added product areas or to organise their workplaces in skill-intensive ways.

“In this context there is only limited demand for level three apprentice skills among British employers and the government may encounter resistance from some employers to its recent proposal to introduce a levy on large firms to help fund apprentice training.

“Considerable challenges lie ahead to design such a levy in ways that will both achieve its objectives — to expand high-quality apprentice training — and secure buy-in from a significant proportion of employers.”

Most recent government figures, released in this month’s Statistical First Release, show that of the 492,700 apprenticeships provisionally recorded for 2014/15, 36.3 per cent (179,000) were at level three. The provisional figure for the year before was 141,100, or 32.6 per cent of 432,400 apprenticeships were at level three.

And the report says that below level three, the “UK’s apprenticeship system has expanded to reach a high number of trainees and looks on the surface to be very promising in terms of skill development”.

“However, a large proportion of employers of apprentices do not appear to offer high-quality training,” it says.

“Many trainees are aiming only for NVQ level two qualifications rather than the level three or higher qualifications which are typically associated with apprenticeship training in Continental Europe.

“Furthermore, some training under the ‘apprenticeship’ heading for older workers in their existing jobs seems to amount to little more than short-duration skills updating or accreditation of existing skills.”

The report covers a number of other areas relating to education and skills systems, such as technical and vocational qualifications, and the skills shortage in science, technology, engineering and mathematics (Stem) subjects.

Mr Wright said: “Education and skills policy has an important role to play in boosting productivity and living standards. It is vital that there is closer alignment between the requirements of business and the skills and capabilities our education system provides to young people. Far too often there is little if any co-ordination.

“This is made worse by the silo-based approach in Government, which doesn’t have the Department for Business, Innovation and Skills talking to the Department for Education. We on the Select Committees want to show Government how working across policy areas and across parties is possible.

“Working jointly on skills and productivity gives the committees a real opportunity to ensure young people have the skills they need to achieve fulfilling careers and boost the country’s productivity.”

Mr Carmichael said: “Businesses need to ramp up their efforts to engage with schools while our education system needs to get better at equipping pupils with the right skills to enter the workplace and drive these businesses forward.”

Further details of the future programme of the Education and BIS Committees’ joint work on education, skills and productivity is expected to be published later this month.

Follow @FEWeek today from 9am for coverage of a joint committee seminar, featuring NIESR officials as well as high-profile sector figures such as Professor Lady Alison Wolf, covering the contribution the education and skills systems (up to age 19) make to productivity.

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