The Apprenticeship Levy vs The Skills Shortage

A couple of weeks back, as part of the Summer Budget, George Osborne announced that there will be a levy on large businesses to help fund apprenticeship growth. Speaking on apprenticeship growth, Skills Minister Nick Boles said, it was hoped that “by developing the skills of young people, businesses can boost their productivity, employees can harness their talent and we can reach our potential as world beaters.” 

Move forward one week, and the findings from the annual CBI/ Pearson Education and Skills survey is released. This survey included 310 firms employing a total of 1.2 million people in the UK. The survey showed that more than two-thirds of businesses are expected to need more high-skilled staff. However, more than half of these feared that they would not be able to find enough staff with the required skills.

Surely the introduction of the apprenticeship levy will help to reduce the skills gap though?

But will it? Although there is the argument that this survey would have been conducted before any mention of the apprenticeship levy, business leaders are already voicing their concerns on the apprenticeship levy’s effectiveness with regards to reducing the skills gap. 

The Confederation of British Industry’s (CBI) deputy director general, Katja Hall said;

“The government has set out its stall to create a high-skilled economy, but firms are facing a skills emergency now, threatening to starve economic growth.”

Ms Hall went on to say that, “the new levy announced in the Budget may guarantee funding for more apprenticeships, but it’s unlikely to equate to higher quality or deliver the skills that industry needs. Levies on training already exist in the construction sector where two-thirds of employers are already reporting skills shortages”

According the CBI’s deputy director general, 74% of engineering, science and hi-tech firms, 73% of construction firms and 69% of manufacturing firms need more highly skilled workers. Because vocational training is at the heart of most of these sectors, it does seem logical that working on apprenticeship growth is the best way forward for reducing the skills gap in these industries. However, maybe the apprenticeship levy needs to be implemented in conjunction with other changes in order for it to really make a significant impact on the skills shortage. 

We recently did a post on the benefits businesses can gain from having in-house assessors. Businesses use in-house assessors so that they can deliver vocational training internally. Having members of staff that are qualified to carry out in-house assessments can not only be a cost-effective way to up-skill the workforce, but it also means that the training that is being delivered will be more tailored to that organisation. 

Which begs the question, does it not seem to make sense for more employers to train up in-house assessors in their businesses? This way, the funding that employers receive from the apprenticeship levy can be used to take on apprentices that are going to receive more tailored training. If the highly skilled members of staff within an organisation are qualified to assist with the training of new apprentices, then they will be able to pass on the skills and knowledge they have gained from their experience. 

Do you think an increase in in-house assessors would help to maximise the effectiveness of the apprenticeship levy and potentially, in the long term result in resolving the ‘skills emergency’ to an extent?