In April 2024 just before the election, Rishi Sunak announced an increase in apprenticeship funding rates which provided 100% government funding to support the training of employees aged 19-21. This was raised from 95%.
In July 2024 the newly elected Labour government confirmed they would continue this initiative.
New Governing Body – Skills England
Further legislative changes were then announced by the King in his speech, that the UK is to reform the Apprenticeship Levy rules and create a new governing body called Skills England.
The aim of establishing Skills England is to bring together businesses, training providers, mayoral combined authorities (MCAs), unions and the national government to ensure that the country develops a highly trained and productive workforce.
Although productivity in the UK has risen over the years, the country continues to lag behind the other G7 nations. This represents a radical need for the UK to up-skill its entire workforce.
New ‘Growth and Skills Levy’ Proposed
To tackle the productivity issue, Labour has proposed a new ‘Growth and Skills Levy,’ which will replace the current apprenticeship levy scheme. The current scheme taxes larger organisations 0.5% of their payroll bill, which they can then reinvest back into their workforce. However, at the moment they can only purchase apprenticeship training courses from registered training providers with these levy payments.
Prior to the election, Labour pledged that as part of their new ‘Growth and Skills Levy,’ they would allow employers to allocate up to 50% of their apprenticeship funds to non-apprenticeship training. This change, if implemented, will provide employers with the welcome flexibility to invest in alternatives and possibly shorter courses which should benefit a much wider number of employees.
A survey conducted by The Apprentice Academy in 2024 showed the age range of employees enrolled on their apprenticeship programmes (see table below), with the oldest person starting an apprenticeship aged 58.
It is highly likely that by increasing the flexibility of levy funds, the demographics above will change, with older employees opting for shorter training courses.
So, what happens now? Well Skills England (once set up) will be responsible for consulting and creating a list of eligible training programmes that align with the UK skills needs. The Labour government will also need to finalise their proposals regarding the new ‘Growth and Skills Levy.’ Until then, registered training providers, like The Apprentice Academy will be engaging with employers to understand their training needs and priorities and how they can develop appropriate training solutions that will meet the new funding criteria – once announced.