Apprenticeships: Levy
Debate between Viscount Younger of Leckie and Baroness Redfern
Viscount Younger of Leckie
We have already extended it from 18 months to 24 months and we think that that is fine. We are seeing strong signs that it is picking up, with the employers buying into the system. We always said that it would take some time, as I think the noble Lord knows. For example, we are seeing vacancies up and that is very encouraging.
Baroness Redfern (Con)
My Lords, the apprenticeship levy offers organisations the chance to review their workforce strategies, diversify their workforces and address skills shortages. Does my noble friend the Minister therefore think that any underspend of levy money should be ring-fenced to be invested strategically, to tackle identified sector skills challenges?
Viscount Younger of Leckie
I think we made it clear that if there is any underspend, it will become apparent probably no earlier than May 2019. It is clear that if there is any underspend, the money available will go back into apprenticeships, so it is important that the focus is on these new level standard apprenticeships.
Apprenticeships: Levy
Debate between Viscount Younger of Leckie and Baroness Redfern
Viscount Younger of Leckie
I hope that I can reassure the noble Lord that the Government have awarded £490 million to providers across the country to deliver apprenticeship training for smaller businesses from January 2018 to April 2019. Today, we have announced that in April we will be making available an additional £80 million for starts with SMEs which will support up to an extra 40,000 apprenticeships. Also, in terms of flexibility, from April levy-paying employers will be able to transfer up to 10% of the annual value of the funds entering their digital accounts to other employers, including SMEs.
Baroness Redfern (Con)
My Lords, the success of SMEs is critical to the UK economy, as is a thriving apprenticeship system. For our SMEs, a central fund enables the Government to fund 90% of the training programme, which the Minister has alluded to, leaving only 10% of the costs to be covered by businesses themselves. Unfortunately, there is still a poor level of understanding of the levy and how it can be spent among employers. Does the Minister agree that, although there has been a drop in apprenticeship starts, calling the new system a failure is not only a huge simplification but writes off the new apprenticeship system before it has even had a chance to embed? What apprenticeships need right now is positivity and action.
Viscount Younger of Leckie
My noble friend is right to say that we must not lose sight of what we are actually doing here, which is why we have introduced these reforms. It is the largest government reform of apprenticeships that has ever been made. The key point here is that we are putting quality at the heart of our reforms. We need to look at how the system is operating and provide some flexibility in the system, which is the gist of the original Question asked by the noble Lord, Lord Blunkett.