The Edge Foundation has released its latest report, Flex Without Compromise. The report examines how and if a flexible skills and apprenticeship levy could be designed. It also looks at levers outside the levy to minimize the impact of the levy on the apprenticeship offering in England.
Edge highlights our concerns in the report that unless this policy is carefully designed it could squeeze funding opportunities for apprenticeships – and continue the worrying decline in young people taking up apprenticeships at the entry level.
The Growth and Skills Levy may compromise the achievement of other Government Policies and Missions: the Youth Guarantee, which is key to the Opportunity Mission and the Growth Mission. (SMEs and industries that are integral to growth will be the most likely to suffer).
We should instead focus on the levers that can be pulled in the apprenticeship system to make a significant difference in employers’ ability use their levy to create more entry-level opportunities, rather than jumping straight to the flexing of the levy. We should not forget that apprenticeships are there for both employers and young people.
The Apprenticeship Levy has taught us valuable lessons about the importance of a clearly defined purpose and the ‘Treasury Margin’. We also provide a number of options that the Government and Skills England can consider when deciding how much of the levy should be allocated to non-apprenticeship training, and what types of training would qualify for the funding. This could help reduce the unintended effects of reforms that may hinder rather than promote greater high-quality vocational training opportunities for young people.
The Government must explore these broader changes, at least alongside the carefully developed policy. This will allow the Government to ensure that the transition to Growth and Skills Levy is as smooth as possible without compromising the apprenticeship offer. We can now start designing a new system with all of these factors in mind.
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