CBI calls for urgent reform to apprenticeship levy

The government must take urgent steps to reform the apprenticeship levy in England, according to a Confederation of British Industry (CBI) report.

In Learning on the job: Improving the Apprenticeship Levy, the CBI said that although employers invest more than £44bn a year in skills training, two years after the introduction of the apprenticeship levy, the overall number of apprenticeship starts remains significantly down.

With growing financial pressure raising questions about the sustainability of the apprenticeship levy, the government must now urgently launch its promised public consultation on levy plans after 2020.

Matthew Fell, CBI chief UK policy director, said: “With apprenticeship starts significantly down, it’s clear that the levy is not working as intended – especially for smaller firms. Despite its rocky start, employers want to support the government’s efforts to evolve the system and play their part in making the apprenticeship levy work.”

Without urgent action, the apprenticeship levy risks becoming a roadblock to the government’s efforts to modernise the skills system, he said.

“Businesses are confused and crying out for clarity on how their levy funds are being used. They read speculation in the papers that the levy is overspent but are themselves struggling to utilise their levy funds for training.”

The government must do as it has previously promised and urgently consult businesses about the levy’s future well before the end of the year, he added.

Recommendations for reform in the report include increasing transparency around levy receipts and expenditure; making the levy system more user-friendly with practical, online support and locally-led ‘matching services’ which allow large firms to pass on unused funds; creating a sustainable financial plan for the levy budget; and opening up conversations about the future of the levy – including broadening the apprenticeship levy into a ‘flexible skills levy’, which would cover a wider range of training.