Phillipson muddies water on 50% growth and skills levy pledge

Bridget Phillipson is at odds with her own department about whether employers will be able to use “up to 50 per cent” of their growth and skills levy contributions on non-apprenticeship training.

Labour pledged to introduce the threshold in opposition under a plan to widen the apprenticeship levy announced by leader Keir Starmer in 2022.

But the figure was missing from the party’s general election manifesto and hasn’t been mentioned by the Department for Education ministerial team since. Sources close to the government told FE Week the threshold had been all but dropped.

Children and families minister Janet Daby told a Westminster Hall debate on apprenticeships last month that the 50 per cent pledge was “currently being reviewed”.

But education secretary Phillipson suggested the threshold was still policy this week during education questions in the House of Commons.

Shadow education minister Neil O’Brien asked: “Before the election, Labour promised to let businesses spend 50 per cent of their apprenticeship levy money on non-apprenticeships, but now ministers say the commitment is under review. Will the secretary of state confirm when the review of her own policy will conclude?”

Phillipson replied: “We remain committed to reforming the failing apprenticeship levy and turning it into a growth and skills levy with up to 50 per cent flexibility for employers, driving new opportunities in growth areas across our country, alongside ensuring that we deliver many more apprenticeship starts for our young people.”

FE Week asked the DfE to confirm Phillipson’s suggestion that the “up to 50 per cent” threshold was still the plan, or whether the education secretary had misspoken, but the department did not provide a straight answer.

Background information was issued instead which only said the “new growth and skills levy-funded offer will deliver greater flexibility for learners and employers” and the DfE “will set out more details on the offer in the new year, when Skills England will also publish their report following engagement with employers over the autumn”.

The conflicting messaging has been criticised.

O’Brien said: “This is just the latest example of confusion and chaos in Labour’s education policy. 

“With ministers once again saying one thing before the election and another entirely after, the government urgently needs to clarify whether their pledges on apprentices still stand, or if they are just another broken promise.”

Ben Rowland, chief executive of the Association of Employment and Learning Providers, added: “Critically, there was no manifesto commitment on allowing employers to spend up to 50 per cent of their levy on non-apprenticeship provision, a sensible move given that 98 per cent of the programme budget is now spent. 

“The government, though, needs to quickly adopt a clear position on all of this, and communicate it to employers, many of whom are increasingly confused about what is happening and their role in skills and productivity.”

Skills England, the DfE’s new arms-length body, has been tasked with implementing the growth and skills levy. 

Plans for its design are so far unclear, and no timeline for implementation has been released, but the DfE has said it will involve widening the levy to fund other forms of training, the introduction of shorter apprenticeships, foundation-level apprenticeships and the removal of levy funding for level 7 apprenticeships.