23 March 2022
The Lifelong Education Commission welcomes the Chancellor's plan to revisit how the UK tax system can best incentivise employers to invest in adult education. We especially support the proposal to scrutinise the role of the Apprenticeship Levy, which as it stands is failing to meet the needs for which it was set up.
The Apprenticeship Levy suffers from a severe lack of transparency: how much of the total take is underspent, and how much is recycled into the system. It has also moved quite far from its original intent. Rather than helping young people get a foothold in their desired careers, it is increasingly being used to support those already in the workforce upskilling through 'in-work' qualifications, including degree apprenticeships. These are also increasingly in non-technical skills such as leadership and management, which is fairly removed from the core vocational mission that apprenticeships are meant to represent.
We believe that the Apprenticeship Levy needs to be overhauled, which includes making it a joined-up policy shared between HM Treasury and the Department for Education, under the auspices of the Apprenticeships and Skills Minister. In addition, a clear system of skills tax credits, modelled on the system of R&D relief, should be implemented to support wider in-work training. That way, the Apprenticeship Levy can be focused clearly and exclusively on the task of bringing young people into the world of work.
You can download our Response in PDF here: