The government’s ambition is for three million apprenticeship starts across the board during this parliament; the levy is part of the means to achieve this. Collected from larger UK employers, it will support post-16 apprentice training across all company sizes in England (training is devolved).
Such levies operate successfully in more than 50 countries world-wide, with the UK’s Construction Industry Training Board (CITB) retaining it, although significant skill shortages remain. A levy is not an automatic solution; it wasn’t for the EITB.
But extra spending/funding is definitely required, as the Social Market Foundation’s Alison Wolf points out in her July 2015 paper ‘Fixing a Broken Training System: The case for an apprenticeship levy’ (http://is.gd/HoaQ8U). She says: “Under current funding arrangements, three million new apprenticeships would leave [English] funding of only £2,567 available per apprentice.”
A level 3 Engineering Manufacture apprenticeship is funded at £14,292/year;a level 2 Intermediate Management one at £3,255/annum. It is the lower cost, lower skill apprenticeships where the volume currently is. Indeed, in 2013/14, of the 440,000-odd apprenticeship starts, just 16,000 were in engineering (all levels), while today’s EITB equivalent Semta’s ambition is for 16,000 Higher Aprenticeships (level 4 and above) in 2016 alone. EngineeringUK says we need 56,000 apprenticeships/year at level 3 from 2012 to 2022; with almost double this number required at level 4 (taking in apprenticeships and other further education).
If we are to become like Germany, Austria, Switzerland or Denmark where, says Wolf’s report, virtually all apprentices follow programmes that would be equivalent to our Advanced Apprenticeship (level 3), £2,567 simply doesn’t cut it. She puts the additional funding requirement at £2 billion, with this topping up the government’s current £1.5 billion training contribution from taxation (which may or may not continue).
Popular with those having to stump up it will not be, but neither are skill shortages. And there’s no point forever looking admiringly at continental firms, as we have done for years; we need to do something to be like them and we have not done so yet.
This article was originally published in the October 2015 issue of Machinery magazine.
