Apprenticeships

Shockat Adam Excerpts

Tuesday 4th February 2025 Westminster Hall

[Shockat Adam (Leicester South) (Ind)]

It is a pleasure to serve under your chairmanship, Ms Jardine. I thank my hon. Friend the Member for Peterborough (Andrew Pakes); I have a business in Peterborough, and I concur with everything he said.

Let me begin by highlighting the remarkable return on investment that apprenticeships provide. I know from my time in Parliament that everything leads to the Treasury. Studies have shown that every £1 invested in level 2 and level 3 apprenticeship training will see a return of between £26 and £28. That is a big win not just for employers, but for apprentices.

For many individuals who do not thrive in traditional academic environments, apprenticeships are a lifeline. I lost so many friends, colleagues and peers who were brighter by far than I was, but who just did not fit into the conventional education system. If they had had an apprenticeship model they would have been really successful, but unfortunately they are now without work after so many decades. That is especially the case in unconventional areas like ours.

There are several challenges that employers and apprentices face. Among the most important is system complexity. For the employers I have spoken to, it is so complicated to employ apprentices. The system was meant to make things easier, but it has made things more complicated.

We need to concentrate on making the levy system a lot simpler for employers. We may need to revisit the tax treatment of self-funded training. Employer-funded training benefits from broad tax exemptions, while self-funded training does not enjoy the same advantages. To encourage greater training uptake among the self-employed and smaller businesses, we should align the tax relief for self-funded training and employer-funded training, levelling the playing field and incentivising skills development. We must also improve administrative support and reduce the regulatory complex. The decline in apprenticeship numbers and the overall reduction in training participation are not just statistics; they are signals that our current system is too complex and that both employers and apprentices are facing real, tangible challenges.

Before I conclude, I have a few questions for the Minister. How will the Government simplify the apprenticeship levy to ensure a uniform and effective subsidy rate for all employers, regardless of size? What measures will be introduced to ensure that public funding for adult education is increased and spent effectively to achieve outcomes? How do the Government plan to address the administrative burdens that discourage employers? Will the tax treatment of self-funded training be reviewed to create a level playing field for everybody?