Image source, Getty Images
- Author, Josh Parry
- Role, BBC news
Labor is promising to give companies more flexibility in spending government money currently earmarked for apprenticeships if they win the July election.
Shadow education secretary Bridget Phillipson says the party will allow companies to use up to 50% of the money provided by the government to fund apprenticeships or training for existing staff.
Labor previously outlined the plan to “address skills shortages”, but the announcement provides more detail on how it hopes it would work in practice.
It comes after the Conservatives said they would cut some university courses to fund more apprenticeships.
The Conservative Party called Labour’s proposal ‘poorly thought out’.
Apprenticeships are partly funded by money raised through taxes, but also through an ‘apprenticeship levy’ paid by larger companies with an annual wage bill of more than £3 million.
These companies, but also smaller companies, can then use that money to train students.
Labour’s plans for what it has called a ‘growth and skills levy’ will see businesses given the choice to spend up to half of the money they receive on training existing staff in ‘high-level technical skills’ , such as modernization or engineering.
Under the plans, employers could also offer ‘pre-apprenticeship training’ courses to prepare people for full apprenticeships or jobs.
At least 50% of the money from the levy would still be earmarked for apprenticeships.
They say all courses must come from an approved list of essential skills, including areas such as digital and green skills, social care or childcare, and that companies would not be able to use these for in-house training such as HR or healthcare and healthcare. safety.
Labor said if businesses used just 3% of the extra flexibility, it could create 150,000 apprenticeships for young people.
Bridget Phillipson said the plans would create a “golden age of lifelong learning”.
She added: “Labour will put businesses in the driving seat in creating the opportunities people need to get through to work.”
A party spokesperson said they had no plans to increase the levy.
Education Minister Gillian Keegan said Labour’s plans would halve the number of apprenticeships and penalize small and medium-sized businesses.
“Since 2010, we have built a world-class apprenticeship system from the ground up… creating pathways into 70% of professions through apprenticeships.”
The Liberal Democrats said their own plans were to give every adult a ‘pot of money’ over their working lives to spend on education and retraining.
The Institute for Fiscal Studies (IFS) has warned that for the internship plans put in place by any party to be successful, more companies must be convinced to take advantage of the available funding.
Imran Tahir, research economist at the IFS, said: “Both major parties have now set ambitions to increase the number of workers – and especially young workers – in training or apprenticeships.
‘Ultimately, employers will decide how to use the funding, and currently many are choosing not to use the funding available.
“If these new programs are to benefit the youngest workers, both parties would need to convince employers to change their current patterns, with almost half of apprenticeships funded by the levy being funded by workers aged 25 and over.”
David Hughes, chief executive of the Association of Colleges, said the plans were a “good first step” in transforming the current apprenticeship levy, which he said had “not delivered for young people”.
He added: “I would like to see a greater commitment to increasing funding for training and skills in colleges for adults who need to learn in a rapidly changing world.
“Without urgent and significant growth in college opportunities, millions of adults are at risk of being left behind as technology changes.”
According to the IFS, average employer spending on training has fallen by 27% in real terms since 2011, and government spending on adult education and skills has fallen by 31% over the same period.
The number of people following training has also fallen in recent years.
In England, 54.6% of pupils completed and passed a GCSE in 2022-23, well below the government’s target of 67% by the end of 2024-25.
A March 2022 Department for Education report found that four in 10 people who did not complete their internships cited personal reasons such as mental health issues, caring responsibilities or career changes.
However, around four in ten also said that the apprenticeship system was poorly managed, that they were not given enough time for training or that it did not meet their expectations.
There are no UK-wide figures on pupil numbers, but in 2023 there were 752,200 in England, which is higher than during the disruption of the Covid pandemic, but lower than in the mid-2010s.
Additional reporting by Branwen Jeffreys and Louise Martin