Perkins pledges additional spending on SME apprenticeships

Labour's plan to replace the apprenticeship levy won't reduce SME apprenticeships, the shadow minister said

Labour's plan to replace the apprenticeship levy won't reduce SME apprenticeships, the shadow minister said

27 Jun 2023, 17:24

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The Labour Party will commit additional spending for a ringfenced budget for apprenticeships in small businesses, the shadow skills minister has confirmed. 

Toby Perkins told the Association of Employment and Learning Providers national conference in London this morning that an “additional spending commitment” had been agreed with the shadow treasury team to fund apprenticeships in small and medium-sized businesses. 

The opposition announced plans to replace the apprenticeship levy with a skills and growth levy at its annual party conference last September.

Should it win the next general election, levy-paying employers will be able to spend up to 50 per cent of their contribution on non-apprenticeship courses. At least 50 per cent would need to be spent on apprenticeships. 

With employers therefore likely to spend more of their levy contributions, sector and provider leaders have been concerned that Labour’s plans would leave no funding for apprenticeships in small and medium-sized businesses, which are currently funded from unused levy funds. 

“There will be no reduction in the amount of funding available to fund non-levy payers’ apprenticeship funding” Toby Perkins, Labour’s shadow skills minister, said today. 

“One of the big failures of the apprenticeship levy and the apprenticeship reforms more generally has been the reduction in apprenticeships in SMEs. Both the uncertainty of funding and the complexity of bureaucracy are barriers that prevent SMEs from taking on apprentices,” Perkins said.

“So I repeat, if we’re successful in helping levy payers spend more of their levy, this will not reduce the budget set for SME apprenticeships.”

Pressed from the conference floor by Crawford Knott, managing director of Hawk Training, about safeguarding SME apprenticeship spending, Perkins said that supporting levy payers to use more of their levy will mean “an additional spending commitment” adding, “they’re tough to get out of our shadow treasury team.”

Elsewhere in his speech, Perkins said that funding for the flexible non-apprenticeships side of the skills and growth levy should be spent on courses that benefit “the employability of the learner in general, not just to their usefulness to their current employer.”

Perkins reiterated Labour’s plans to launch Skills England, a new body which would oversee the new levy and decide what non-apprenticeship courses employers could spend their levy funding on. 

The shadow minister would not be drawn on whether Skills England would replace the Institute for Apprenticeships and Technical Education, but told delegates: “We are exploring what the role of these different organisations will be.”

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