Councils call on Government to reform apprenticeship levy following drop in applications

Release Date: 07 January 2019

The number of residents from Richmond and four other London boroughs starting an apprenticeship has fallen by over a quarter in the last year, following the introduction of a Government levy.

7,390 people from Richmond, Croydon, Sutton, Merton and Kingston, signed up for apprenticeships in 2017/18, compared to 10,030 in 2016/17.

A major change to the funding of apprenticeships was introduced in April 2017 with the start of the government’s Apprenticeship Levy. This put skills development in the hands of employers to address skills shortages within their business and to help achieve the Government’s target of 3 million apprenticeship starts by 2020.

A recent London-wide survey showed that 42% of levy-paying businesses in London did not expect to use any of their levy funds in the next year and a further 4% expected to spend less than half of the funds.

At the first meeting of the South London Skills and Employment Board in November, employer members talked about the challenges of the Apprenticeship Levy system and how various requirements were impeding the effective use of the funds.

So, Richmond Council has joined with other London boroughs from the South London Partnership, the Deputy Mayor of London and employer representatives to press the government to reform the Apprenticeship Levy.

Writing to the Chancellor, Philip Hammond, and Skills Minister, Anne Milton, the London partners have raised concerns about the impacts on the capital’s skills shortages and productivity challenges, and have jointly proposed ways to improve how the levy works.

Cllr Gareth Roberts, the Leader of Richmond Council, said:

“Apprenticeships provide a clear path for young people from education to employment. They provide young people with the opportunity to reach their potential, giving them what it takes to achieve a successful career.

“Hiring apprentices helps businesses to grow their own talent by developing a motivated, skilled and qualified workforce. However, the current Apprenticeship Levy is not working. The Government needs to take more responsibility at ensuring the Levy is fit for purpose and will provide the best for all Richmond residents and businesses.”

Cllr Ruth Dombey, Leader of Sutton Council and SLP Skills Lead, added:

“Apprenticeships are a key route for people to develop the skills they need to move into work or progress in their careers. They also have a critical role in helping provide the skilled workers that our businesses need to survive and thrive.

“We want to see more of our residents accessing these opportunities. But these figures show that things are going in the wrong direction.

“We support the Apprenticeship Levy in principal – but it must be reformed so that it works to achieve the outcomes we need for our residents and to provide the skills and experience to support productivity and growth in our businesses and service providers.

“We want to work with government to address a range of current problems, so that the Apprenticeship Levy can work for South London’s employers and residents.”

Darren Hockaday, SLP Skills & Employment Board member and HR Director Gatwick Airport, said:

“With an ever increasingly competitive market for employers, there has never been such a burning platform to have all routes to employment operating as effectively as they can. Apprentices play a key role as one of many varied routes into a career. Employers need certainty of this supply of labour as with all others, at a time when the source of labour faces so many challenges. Our apprentices at Gatwick Airport provide a vital role in delivering engineering solutions to service the needs of the airport and our customers.”

Notes for editors

South London Partnership (SLP) is a voluntary partnership of five London boroughs: Croydon, Kingston upon Thames, Merton, Richmond upon Thames, and Sutton. More information on SLP’s work can be found at www.southlondonpartnership.co.uk.

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Reference: P004/19

Updated: 21 January 2019