London, UK: The start of National Apprenticeship Week (February 6-12) has prompted the RHA to call again for a skills levy to replace the current apprenticeship levy (AL) scheme.
Rod McKenzie, the RHA’s director for policy and public affairs, said: “Although well-intentioned we have heard loud and clear from our members that it (AL scheme) doesn’t work well for our industry.
“It was aimed at firms with a £3m plus payroll, forcing them to pay into a government pot – they could then draw down and pay for training. Our sector has paid in £735m but only got out 20% of that. Why? There’s a big gap between the way that the AL works and the needs of thousands of SMEs.
“We are short of HGV and coach drivers, mechanics and back room staff – we need to help, not hinder, business. That’s why we are campaigning for a skills levy to replace the old scheme – shorter courses, boot camps and courses best suited to employers.
“We want training fully paid to firms that aren’t in the AL. And we need greater flexibility, less red tape – that’s a win-win for our industry. We also need to recruit more women and those from BAME backgrounds.”
Other trade bodies are also calling for urgent reform to the Apprenticeship Levy system. The British Retail Consortium, UKHospitality, TechUK, and the Recruitment & Employment Confederation, said in a letter to the government, that it is “holding back investment” in critical training that is vital to train the future workforce, provide better wages, increase productivity, and boost economic growth.
The current system requires businesses to contribute hundreds of millions of pounds into a pot, but it only allows these funds to be spent in an overly restricted way. For example, businesses cannot use the money to fund any courses that are shorter than one year in duration. As a result, £3.5bn of potential investment into the UK labour market has gone to waste at a time when training is urgently needed, the letter said.
The trade bodies call on the government to widen the Apprenticeship Levy into a broader Skills Levy to allow businesses to spend their funds on a wider range of accredited courses including shorter, more targeted courses, or more tailored programmes, including functional and digital skills.
Neil Carberry, chief executive of Recruitment and Employment Confederation, said:“The levy has always suffered by being imposed on businesses, rather than being designed with them and with learners. That means it has not had the incentive effects originally hoped for. It also pushes many workers out –like the million temps placed into work every day. Their wages are levied, but the system locks them out of training. A levy that allowed firms to access a range of high-quality training would see far greater uptake, and put more pressure on those firms who are not doing enough. A redesign with business at the table could transform skills performance, growth and prosperity.”
