Debate the Effectiveness of the apprenticeship levy - House of Commons, 11 February 2020

The LGA’s apprenticeships support programme provides a range of practical support and advice for local authorities and their maintained schools on developing and enhancing their apprenticeship programme.

Key messages

  • The UK faces significant skills challenges, including shortages of higher-skilled technical and vocational workers, which hamper economic growth and are holding our country back. Despite significant levels of investment, our current system has failed to deliver meaningful change or address geographical skills gaps.
  • To help councils and combined authorities close their skills gaps, the Government should enable them to coordinate a localised approach to skills. This includes loosening Apprenticeship Levy restrictions. We welcome announcements made on this in the 2018 Budget, but the Government must now go further and faster. People need to be given the tools and skills to help them build their career, and good apprenticeships can lead straight into a full-time job.
  • The LGA estimates the Apprenticeship Levy costs local government £207 million a year. National policy requires the Levy is spent against standards within two years. Many standards were not ready to use when the Levy was introduced and some key standards are still not yet fully accessible.
  • Alongside this, national policy does not allow levy contributions to be fully pooled locally, and funds unspent within 24 months must be returned to the Treasury rather than being retained locally. Funds expire on a month-by-month basis, with the oldest unused funds expiring first. This hampers efforts to have a more ‘joined up’ and strategic approach to apprenticeship spending locally.
  • The Government must use the upcoming Apprenticeship Levy review to enable local areas to pool levy contributions, loosen levy restrictions including around its use, and ensure all levy underspend goes back to local areas. Most importantly, the apprenticeships system should be fully devolved to combined authorities.
  • In addition to our recommended Apprenticeship Levy reforms, the LGA has developed Work Local. This is a place-based proposal for change to skills policy. Our current employment and skills system is highly fragmented. In 2016/17, more than £10 billion of employment and skills funding was commissioned across 20 different national schemes, with varying criteria and eligibility. Work Local proposes that local areas should have the powers and funding to plan, commission and oversee a joined-up skills and employment service.

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Debate the Effectiveness of the apprenticeship levy - House of Commons, 11 February 2020