Employers will face no cap on the amount of levy funding they can spend on new apprenticeship units when an initial “tight group” launches in April, skills minister Jacqui Smith has said.
FE Week understands as few as eight short courses will initially be fundable through the reformed growth and skills levy from the new financial year – with seven in engineering and construction and one in AI.
News of the limited first wave comes just weeks before the government’s rollout date, with no detailed announcement yet published on the units’ content, duration, funding bands or assessment arrangements.
Damp squib
Last year, the Labour government confirmed it would introduce new short courses, dubbed ‘apprenticeship units’, from April in priority sectors aligned to the industrial strategy.
FE Week understands the initial batch will focus on areas such as heat pump installation, EV charging point installation, solar panel installation and welding, with another on AI for business leaders.
Ministers have indicated further units will follow after April.
Asked by FE Week this week why no details had yet been published, Smith said: “They have been in development, and we will launch a quite tight group of apprenticeship units in April.
“We will make more announcements about exactly what it is [that] will be developed as apprenticeship units, or will be delivered as apprenticeship units post-April.”
Unlimited power?
In 2022, while in opposition, Labour committed to widening the apprenticeship levy so employers could spend up to 50 per cent of their contributions on non-apprenticeship training.
But the threshold was missing from the party’s election manifesto and ministers have moved away from the 50 per cent figure and refused to confirm a cap since entering government.
Smith confirmed no fixed limit had been set when asked what proportion of levy contributions employers could spend on the new apprenticeship units from April.
“It is important that there is this flexibility as well as new foundation apprenticeships and shorter duration apprenticeships,” she said. “The ongoing development of apprenticeship units that can be part of that.
“We have not set a specific contribution precisely because what we’re interested in is the flexibility that enables employers to use what they need in order to develop their workforce.
“So, looking at what we are doing, both the tilt to young people, which we’ve been very clear that we will use policy to achieve, and also delivery against the industrial strategy.”
Pressed on whether this effectively meant employers will have an unlimited use of levy funds for non-apprenticeship training, Smith replied: “Well, I didn’t say it was unlimited. I said there isn’t a set percentage of flexibility.
“There isn’t going to be an overall level of the apprenticeship levy that is used on flexibility, but we’ve gone much further than the plans in opposition, in terms of how we can flex the levy, and we’re continuing to talk to employers.
“We’re continuing to use Skills England to identify where the flexibility is needed, where we need short courses, where we need to update apprenticeships, where we need to develop new areas of skills and apprenticeships.”
‘Paltry’ offer compared to Labour’s commitment
Stephen Evans, chief executive of Learning and Work Institute, said the limited number of units would disappoint employers.
“We think employers should have broader flexibility to spend part of their levy on training that isn’t apprenticeships, so a total of just eight units almost all in construction or engineering wouldn’t be enough and would likely seem quite paltry to a lot of employers compared to Labour’s promise of up to 50 per cent flex for all employers.”
He added any flexibility “should have a cap so the primary focus is on apprenticeships”, and flagged an L&W blueprint for a “flex and match” levy that argued employers which invest more in youth apprenticeships should get greater flexibility.
Hannah Larsen, policy officer at the British Chambers of Commerce, said setting no limit for the flexibility would simplify the system, but warned the initial offer was too restricted.
“If funding for apprenticeship units is not limited then it will provide a level playing field for businesses on flexibility and make the system easier to administer.
“But it is disappointing that just eight apprenticeship units are being offered, especially considering the likely defunding of management and higher-level apprenticeships.
“While it makes sense to start with areas facing dire skills shortages, there are many other sectors where firms need to upskill people quickly.
“Hopefully, further apprenticeship units will quickly be rolled out so that more businesses and employees can benefit.”
The Department for Work and Pensions said it would provide further information “in due course”.
Jacqui Smith likes flexibility and employer choice when it suits her ie with failing initiatives such as units or foundation apprenticeships, but not when it is what employers really value ie management apprenticeships.