A coalition of local government and major employers in the capital has joined forces to propose urgent reforms to the Apprenticeship Levy that will ensure apprenticeships can play a bigger role in the capital’s recovery.
The cross-party coalition has also written a joint letter to Skills Minister Gillian Keegan MP listing its proposed solutions.
The government introduced the Apprenticeship Levy to give employers a greater role in addressing skills shortages and to create more apprenticeships. However, many employers – including London’s boroughs – cannot make the most of the funds available to them because of flaws in the design of the scheme. Data from government shows £504m of levy funds were lost to levy-paying employers in the first four months of this year alone.
The paper calls on central government to introduce greater flexibilities to the Apprenticeship Levy. These include:
- Temporarily extending the amount of time employers have to spend their levy from two years to three years.
- Extending the availability of the current employer incentives and increasing them to reflect the higher cost of living, working and training in London.
- Providing additional government support to small businesses looking to take on apprentices.
- Allowing some levy funding to be used for pre-employment training to get people ready for an apprenticeship.
- Allowing levy-paying employers to use some of their levy to contribute towards the wage costs of new apprentices from priority groups.
These changes would lead to a substantial increase in apprenticeship opportunities, minimising the risks of long-term unemployment and supporting the economic and social recovery from the pandemic.
