Councils call for devolution of the apprenticeship levy

Latest figures show there were 195,200 apprenticeship starts between April and November 2017. This represents a 40% drop compared with 326,700 starts in the corresponding seven months in 2016.

The LGA, which represents 370 councils in England and Wales, says significant changes to the Apprenticeship Levy are needed to achieve its potential. The complexity of the system, coupled with the fact that a number of key apprenticeship standards such as teaching and social care are not yet available, are key issues that need to be addressed to help increase the number of starts.

The government has recently indicated that it will work with employers on how the levy can be spent more effectively to achieve productivity across the country. The LGA believes a locally coordinated approach to these reforms would make a massive difference. For the reforms to succeed, council leaders are calling for:

  • Local areas to be allowed to pool Levy contributions and have greater flexibility on how they are used, including for instance on pre-apprenticeship training;
  • All Levy underspend to go back to local areas where it is raised, rather than being handed back to the Treasury;
  • The apprenticeships system to be fully devolved, initially to combined authorities but eventually to all parts of the country;
  • Devolve all non-Levy apprenticeship funding to local areas so they can support businesses and raise awareness and promote the levy locally to employers.

An extension on the two-year limit (from April 2017) to spend the Levy against key standards for local authority workforces including teaching and social care. Currently these cannot be accessed until September 2018 giving councils too little time to spend their Levy.

Together the LGA said these changes would free combined authorities and councils, employers, and colleges to work together with the Government to boost the number of quality local apprenticeships. This would give young people and adults the careers advice to match local skills with local jobs, and help address the skills gaps and shortages local employers face up and down the country.

Cllr Sir Richard Leese, Chair of the LGA’s City Regions Board, said, “These figures are an early warning that the Apprenticeship Levy must be improved if it is to deliver the right training at the right time both for employers and for those wishing to pursue an apprenticeship.

“It is encouraging that the government will review the policy, and recognises the need to work in partnership to achieve the improvements needed.

“Combined authorities and councils fully support the ambitious target of creating 3 million apprenticeships by 2020 but could do far more if the government allowed them to pool and plan local provision.

“Devolving apprenticeship funding to the local areas in which they are used will allow combined authorities and councils, schools, colleges and employers to work together to help people get the skills they need to progress in work, and supply businesses with the right skills at the right time to help local economies grow.”

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