Government barriers preventing employers investing in apprenticeships, says City & Guilds Group

Written by
Changeboard Team

10 Jan 2019

10 Jan 2019 • by Changeboard Team

Employers want greater flexibility in how they can spend their apprenticeship levy funds, with the current ‘one-size fits all’ approach limiting uptake and investment, according to new research by City & Guilds Group.

An overwhelming 93% of employers cite some form of blocker to investing in apprenticeships, with a 92% of levy-paying employers wanting more flexibility in how they are allowed to spend their apprenticeship allowance.

If allowed more freedom, nearly half (45%) of the 765 businesses surveyed would choose to invest the money in non-apprenticeship training, including professional courses, technical skills training, management development and work placements.

The government announced plans to discuss the levy with employers in October last year, but has yet to set a date for the consultation.

“The turmoil we are facing, as a result of uncertainty around Brexit as well as the rapidly changing world we live in, means that it’s never been more urgent to improve the skills of our workforce and invest in home-growing the skills that we may no longer be able to import from abroad. Apprenticeships have a huge potential to deliver on this, but the system is still not responsive enough to the needs of employers. Businesses need more flexibility to use the apprenticeship levy in a way that will truly help them fill skills gaps, upskill their workforce and shore up their talent pipeline for the future,” said Kirstie Donnelly, managing director at City & Guilds Group.

“Flexibility alone isn’t enough. The government must provide greater clarity on apprenticeship data in order to equip the industry with the holistic view it needs and enable employers to understand its wider impact. Although we welcome the government’s commitment to introduce reforms, they are yet to set this in motion. We have set out a list of twelve recommendations, eleven of which are for the government to act on, as we urge them to prioritise apprenticeships, maintain momentum and make better use of data to help all those involved to create the skilled and productive workforce we so desperately need,” she added.

According to the research, many businesses are finding it hard to effectively engage with the levy, with an overwhelming 95% failing to spend the entirety of their apprenticeship budget in the first 12 months of the system. On average, the businesses surveyed say they will spend only 56% of their allotted annual funds in the future.

Employers cite a lack of suitable apprentices, poor training and a lack of board buy-in as the main reasons for poor investment in the levy.