Apprenticeship Levy

Debate between Kate Green and Richard Graham

Tuesday 11th February 2020 Westminster Hall

[Richard Graham]

That is an important point, and the hon. Lady anticipates what I was coming on to. I have had my own apprentice now for nine years; they do a level 3 business administration course, and there will be other Members here who employ their own apprentices. There is a question mark about whether those at the starting levels of apprenticeships have been supported as well as they could be through the apprenticeship levy.

Interestingly, when I arranged an interview between Business West, which effectively took over the running of apprenticeships from the chamber of commerce in Gloucestershire, with the previous Minister with responsibility for apprenticeships, she said very clearly that in terms of small and medium-sized enterprises

“it has been difficult for the non-levy payers, but we are now transferring them over to a new system which we do want to be simpler for them.”

The Minister who is here in Westminster Hall—the Under-Secretary of State for Education, my hon. Friend the Member for Chippenham (Michelle Donelan)—is not formally the Minister with responsibility for apprenticeships. Indeed, I believe it is true to say that there is still a gap in the Department for Education in terms of an actual apprenticeships Minister, which I hope will be filled soon through an appointment by our new Prime Minister. Nevertheless, I hope the Minister here today will be able to say a little about the speed of transferring the non-levy payers to the new system and how that has progressed. The previous Minister with responsibility for apprenticeships made her comments in July last year, so I hope there has been some progress in that regard.

However, just to respond to the point made by the hon. Member for Barnsley East (Stephanie Peacock), it is quite true that the numbers of level 2 and level 3 apprentices have come down sharply since the introduction of the apprenticeship levy, just as it is true that the numbers of levels 4 to 7 higher apprentices have risen sharply.

[Kate Green (Stretford and Urmston) (Lab)]

I congratulate the hon. Gentleman on securing this debate. He is absolutely right in his analysis of the figures. Last week, I had the great pleasure of shadowing a degree apprentice from my constituency who is studying at the University of Salford while working for Russell’s Construction—it was great to see a young woman taking such a good course in the construction industry. However, I asked Russell’s Construction what opportunity there was for it to deploy the levy through its supply chain to SMEs. The company seemed to be interested in doing that, but it could not see an easy process for doing it. Does the hon. Gentleman agree that that is something the Government might like to think about?

[Richard Graham]

The hon. Lady is absolutely right in one way, but of course a lot has changed relatively recently. Levy employers can now transfer 25% of their levy to other organisations, and the obvious opportunity there is to do it through their supply chain. For example, in a briefing I received from it in November, Tesco said it contributed roughly £20 million a year to the apprenticeship levy but that it is able to spend only about 15% of it, due to the inflexibility of the system. We will come on to the inflexibility of the system, but the key thing is that there is now this opportunity for Tesco to deploy a quarter of its levy, which would be £5 million, to some of the companies in its supply chain, which are typically SMEs. That is incredibly valuable, and I hope it is something that Tesco has taken up.

As a result of the hon. Lady’s question, I hope that other levy employers out there will be more aware of this opportunity. Business West asked a very similar question of the previous Minister with responsibility for apprenticeships:

“What would you advise colleges to do in September if they have gone over their non-Levy allocation and have 16 year olds wanting to start an apprenticeship with a non-Levy employer?”

The previous Minister—the former right hon. Member for Guildford—replied:

“I would approach the larger Levy paying firms in the area…There are lots of Levy payers who have not spent their levy pots.”

That is quite true; the question is whether it is as well-known as it should be. I know of examples from Gloucestershire Engineering Training where our county council and I think another public sector employer have used part of their levy to help an SME to ensure that its apprentice receives the training they need. However, such opportunities are not as widely known about as they should be.