Asked by: Lord Haskel (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have, if any, to modify the Apprenticeship Levy scheme to address (1) dissatisfaction from participants, and (2) concerns about its effectiveness.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Apprenticeship Levy is a key part of the Government’s reforms to the apprenticeship system. It enables employers to make a long-term and sustainable investment in high-quality apprenticeship training.
The Government recognises that employers have frustrations with the way that these Apprenticeship Levy funds can be spent within the apprenticeships system and is delivering a suite of improvements to address these. These include the improvements announced at Spending Review 2021, such as introducing an enhanced recruitment service for SMEs, supporting the use of flexible training models, and introducing a return-on-investment tool to ensure employers can see the benefits that apprentices create in their business.
The Government’s ambition is to encourage greater levels of private sector investment in employee training, both for apprentices and for employees more generally. Therefore, at Spring Statement 2022, the Chancellor announced that he would consider whether further intervention is needed to encourage employers to offer the high-quality training the UK needs. This will include examining whether the current tax system – including the operation of the Apprenticeship Levy – is doing enough to incentivise businesses to invest in the right kinds of training.
While there will not be a formal review of the Apprenticeship Levy as part of this wider consideration on employer investment in training, the Government is committed to protecting the quality of apprenticeship training and further improving the system to respond to the concerns raised by employers.