Team Blitz India
LONDON: Education Secretary Gillian Keegan has criticised big companies pushing to use more apprentice levy funds for up-skilling of current staff rather than investing in young apprentices.
She has warned that this could take money away from small and mediumsized businesses (SMEs), which provide about 30 per cent of yearly apprenticeships. The apprentice levy, started in 2017, makes it mandatory for UK companies with a yearly wage bill over £3 million to set aside 0.5 per cent of their pay bill (minus a £15,000 allowance) for apprenticeships.
Some big retailers like Marks & Spencer, Superdrug, and the Co-operative Group have called for changes to the apprentice levy. However, Keegan stressed that this could reduce the number of available apprenticeships, making it harder for young people to find jobs.
Keegan’s worries match the government’s goal of encouraging SMEs to offer more apprenticeships. Recent changes include removing the 5 per cent contribution requirement for SMEs funding apprenticeships for under-22s and providing £60 million to support more apprenticeships.
While these changes aim to increase apprenticeships, business groups have different opinions. Martin McTague of the Federation of Small Businesses praised the changes for helping SMEs, but larger companies aren’t happy with the current system. Tom Ironside of the British Retail Consortium wants more flexibility in how funds are used.
Stephen Phipson of Make UK also wants reforms, highlighting a 42 per cent drop in engineering apprenticeships since 2017. Corin Crane of the Coventry & Warwickshire Chamber of Commerce mentioned challenges in hiring apprentices, partly because of economic uncertainties and low pay rates. Official numbers show a decrease in apprenticeships since 2015, although completion rates have gone up.
Keegan defended the drop, saying it’s because they’re focusing on improving apprenticeships’ quality and stopping abuses of the system. She emphasised the government’s commitment to keeping high standards in apprenticeship programmes, seeing them as crucial for the UK’s workforce development.
