Industry News

Lack of increase in employer training since apprenticeship levy introduced

The substantial long-term fall in the volume of, and level of investment in, work-based training in the UK has been highlighted by new research from the CIPD.

The report, Addressing employer under-investment in training – the case for a broader training levy, recommends urgent reform of the apprenticeship levy to help address this.

The reasons behind the decline in training are not entirely well understood. Commentators have pointed to factors such as the expansion of the higher education system, which has reduced the need for employers to train, or increased efficiency in training investment. A less optimistic, but just as likely a contributing factor, is the shift towards business models and competitive strategies requiring lower skill levels.

While the reasons aren’t fully known, what is clear is that greater investment in workforce skills is needed, and that relying on employers to voluntarily provide adequate training opportunities has failed.

It was against this background that the government justified the introduction of the apprenticeship levy, an initiative designed to stop the decline in training, while also increasing the number and quality of apprenticeships. However, levies do not always have the desired effect of increasing employer investment in training, and there is evidence that the current arrangements are not working as intended.

The report found:

The levy has failed to increase the number of apprenticeships since its introduction, with current starts down 14% on pre-levy figures.

The substantial long-term fall in the volume of, and level of investment in, work-based training in the UK has been highlighted by new research from the CIPD.The report, Addressing employer under-investment in training – the case for a broader training levy, recommends urgent reform of the apprenticeship levy to help address this.

Whilst more high-quality apprenticeships are certainly needed, they are just one aspect of high-performing workplaces, and other forms of training are equally valuable. For this reason, the CIPD is calling on the government to broaden the apprenticeship levy to a wider training levy, including other forms of accredited training that are aligned to industrial strategy priorities. In addition, it is calling for the creation of a regional skills fund, created by top-slicing levy contributions from the largest employers, to address local skills and demand-side challenges to help boost workforce productivity and increase the overall demand for, and use of, skills in England’s regions.

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