Learning on the job: improving the apprenticeship levy

Automation and AI are transforming the workplace and bringing with them demands for new skills. And with the future shape of the UK’s immigration system remaining unclear, demand for ‘home-grown’ talent is sky high.

Skills are a crucial driver of productivity

According to the 2018 CBI/Pearson Education & Skills Survey, 79% of firms expect to increase their number of high-skilled roles, but 66% fear there will be a lack of sufficiently skilled people to fill these vacancies.

Urgent reform is needed

The Apprenticeship Levy was introduced in April 2017 with the aim of increasing firms’ investment in training. But two years on, many firms report common problems which are preventing them from accessing and delivering quality training. Growing financial pressure is also raising questions about the long-term sustainability of the apprenticeships programme. It’s clear that the Levy must evolve to be more flexible and responsive to the needs of the economy.

The CBI’s new report – ‘Learning on the job: Improving the Apprenticeship Levy’ – sets out a series of urgent steps to reform the Levy so it is fit-for-purpose.

The CBI is calling on the government to:

• Help firms to better understand how the Levy is working, what’s being funded by the government and how their contributions are being spent
• Engage smaller firms with practical, online support and locally-led ‘matching services’ which allow more large firms to pass on unused funds
• Introduce a £100m annual government top-up fund which allows firms of all sizes to continue using the scheme to spend on apprentices of all ages and skill levels
• Fulfil its commitment to publicly consult on options after 2020 - including broadening the Apprenticeship Levy into a ‘Flexible Skills Levy’, which would cover a wider range of high-quality, relevant training.

The upcoming Budget is the opportunity to deliver this reform to encourage more investment in training.

Please contact Ed Richardson for more information about the CBI’s work on the Apprenticeship Levy.