Apprenticeship Levy

Lord McNicol of West Kilbride Excerpts

Tuesday 25th April 2023 Lords Chamber

Asked by

[Lord McNicol of West Kilbride]

To ask His Majesty’s Government what assessment they have made of the sectoral disbursement of the take-up of the Apprenticeship Levy.

[The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)]

My Lords, employers are at the heart of our apprenticeship system. They have developed more than 660 standards across a range of occupations, and they choose which apprenticeships they offer and when. The health and care, business administration and law sector subject areas were each around a quarter of starts last year, benefiting employers operating across all sectors of the economy. We have also seen recent growth in the digital and construction sector subject areas. The apprenticeship levy will enable us to increase funding to £2.7 billion by 2024 to support employers in all sectors to invest in apprenticeships.

[Lord McNicol of West Kilbride (Lab)]

I thank the Minister for her Answer. As one of the few in your Lordships’ House who attained not a degree but a technical qualification—I am immensely proud of my HND—I understand the need for technical education. The apprenticeship levy is seen by many employers, especially those unable to recoup their contributions, as a training tax. This is due to the current scheme’s inflexible, rigid and bureaucratic nature. Does the Minister recognise the need to redress these problems? If so, are there any plans to extend the sectoral remit, the timescale of study and draw-down and the level of application, and thus help improve the apprenticeship schemes?

[Baroness Barran (Con)]

I think the noble Lord would agree that this country needs to invest more in the skills of the workforce, both those entering the workforce and those currently in it. The last thing we need to do is cut back on the amount of funding going into apprenticeships. I remind the House that of the £2.5 billion last year, there was an £11 million underspend, so it was fully disbursed. We do offer employers flexibility; we are spending £550 million on skills boot camps for the kind of short courses to which the noble Lord alludes, as well as working in particular with the creative industries to offer flexible apprenticeships.