Finito World

Initially it sounds a good idea to expand the apprenticeship levy and reform it into the “growth and skills levy”. This would mean that other forms of training were now possible under the scheme, with businesses allowed to use 50 per cent of their apprenticeship funding. This is all part of a general offer to young people between the age of 18 and 21 called the ‘youth guarantee’.

It is difficult to gauge the cost of such a move. Under the previous government, Labour’s proposals were estimated to cost £1.5 billion – and it’s not clear how it would be paid for.  At that time, the then skills minister Rob Halfon argued that it is ‘important that the apprenticeships budget remains ring-fenced for apprenticeships to ensure continued affordability of the programme”.

The real problem is in what firms will do with the money. Some analysis points to the likelihood that firms will use the money from the new levy to cover their costs for training programmes which they would probably have paid for already. Labour stated before coming to power that it would issue a list of approved courses, but already it looks less simple to administer than the levy was before.

The inevitable result of the new levy would be fewer apprenticeships – probably down to under 150,000 per year, a huge decrease in the number of young people having apprenticeships – but that’s only if the figure is right, since it essentially charts a situation where large employers use all their levy and use up the 50 per cent allowed for non-apprenticeship training.

Obviously the situation would be more complex than that – and so the question comes down to the detail of how the policy will be be designed and what incentives will be built into the system. Watch this space.