Debate on the Apprenticeship Levy and the case for the effective delivery of workplace opportunities for young people, House of Lords, 4 July 2019

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. 


Key messages

  • People need to be given the tools and skills to help them build their career. This can be a challenge as our 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. 
  • Despite significant levels of investment, our skills system has failed to have a decisive impact on the varying socio-economic challenges and opportunities in local areas, or make a major impact on outcomes.
  • 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. 
  • 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. It sets out that local areas should have the powers and funding to plan, commission and oversee a joined-up skills and employment service.
  • This is critically important to ensuring that combined authorities, councils and local partners can plan how their areas will respond to the challenges and opportunities of Brexit and the Government’s Industrial Strategy.

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Debate on the Apprenticeship Levy and the case for the effective delivery of workplace opportunities for young people, House of Lords, 4 July 2019