Agencies must tackle flaws to the Apprenticeship Levy

A coalition of local government and major employers in London have said that national and local agencies must tackle flaws to the Apprenticeship Levy system together.

London Councils, the Greater London Authority, London Chamber of Commerce and Industry, London First, West London Alliance, Central London Forward, South London Partnership and Local London have collectively called on the government to reform the Apprenticeship Levy and, in anew paper, have set out how a number of new flexibilities could incentivise employers to take on more apprentices.

An increase in apprenticeships would provide much-needed employment and skills opportunities to Londoners at a time when forecasts predict London’s unemployment total is expected to peak at 7.9 per cent – or 390,000 economically active residents – by July 2021.

The government introduced the Apprenticeship Levy to give employers a greater role in addressing skills shortages and to create more apprenticeships. However, the current apprenticeship system is flawed and 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 £504 million of levy funds were lost to levy-paying employers in the first four months of this year alone.

London Councils is calling on central government to introduce greater flexibilities to address Apprenticeship Levy issues, including temporarily extending the amount of time employers have to spend their levy from two years to three years and extending the availability of the current employer incentives and increasing them to reflect the higher cost of living, working and training in London.

Clare Coghill, London Councils’ executive member for Skills and Employment, said:  “London’s economy has been disproportionately impacted by Covid-19, with higher levels of unemployment and a larger proportion of the workforce on furlough than in other parts of the UK. Unnecessary barriers to using Apprenticeship Levy funding means that Londoners are missing out on vital opportunities to gain skills and experience – skills that are essential to London’s recovery. Businesses are also being blocked from creating apprenticeships that help to fill their skills shortages and support their growth.

“Across London government and business, there is a strong consensus that we need to act now to ensure jobs and training opportunities, including apprenticeships, are made widely available. Apprenticeship Levy reform is the best way of maximising the potential of apprenticeships to equip people with the skills they need to thrive in the labour market, move into different industries or roles and ultimately support our recovery from the pandemic.”