The new Labour government’s plans to replace the UK’s apprenticeship levy with a more flexible “growth and skills levy” have been welcomed by a leading body for university-business collaboration, which has warned that the “narrow” focus on degree apprenticeships has limited industry’s ability to work with higher education.
In a report published on 19 September, the National Centre for Universities and Business (NCUB) endorsed the new administration’s plans to revamp how the £3.5 billion-a-year apprenticeship levy fund is spent, with ministers promising to allow firms to use up to 50 per cent of their levy contributions to fund training on routes other than apprenticeships.
In its report, called Collaboration for Future Skills, the NCUB explains how industry-university collaboration has – since the review of apprenticeships in 2012 by former Dragons’ Den star Doug Richard – increasingly been focused on designing and delivering degree apprenticeships – a situation that has been “compounded by the introduction of the apprenticeship levy from 2017, absorbing significant proportions of businesses’ resources available to engage with the skills system and wider skilling initiatives”.
Degree apprenticeships are one of several recent “highly focused and narrow policy initiatives” that “offer relatively narrow opportunities that limit collaboration to specific programmes” and have “failed to spark wider partnerships across skills, forecasting, development and delivery”, continues the NCUB report, which notes there were 53,000 degree apprentice starts and almost three million university students in 2022-23.
“Channelling resource and solutions into programmes with small cohorts creates impact among these groups, but limits the breadth of impact across the wider student body,” explains the report, which insists that “[business-engaged learning] content which is future-focused, co-developed or co-designed needs to reach more learners to have the impact needed, and policy solutions are needed to expand this reach”.
“[Degree apprenticeships] are not designed to enable collaboration at the scale needed to meet our future skills needs, nor do they spill these benefits into wider learning across university cohorts,” it adds.
In addition, the freeze in university tuition fees at £9,250 for the past seven years now means universities lose money teaching many undergraduate courses – about £1 billion collectively in 2021-22, according to Office for Students financial data – which makes it harder for departments to engage with businesses on innovative curricula design, the report adds.
“Institutions have increasingly less headroom to explore new approaches that better incorporate employer and business partner needs,” it explains, adding how this financial situation “can put higher education systems and provision at odds with the needs of the labour market and supply-side requirements, creating a central challenge to the preparedness, agility and cohesion of the skills pipeline”.
Businesses also face “time constraints on their ability to collaborate with universities”, the report adds, noting that “for many, resources are absorbed by the apprenticeship levy and associated activities”, while many firms do not engage with these courses, which “move[d] too slowly to meet their needs, often iterating via review cycles, which span multiple years”.
“Replacing the apprenticeship levy with a growth and skills levy…should enable employers to invest resources into a broader range of higher education skills provision, alongside apprenticeships, doing so in a way that maximises return on investment based on their needs,” says the report.
It also urges the newly created body Skills England to “create a structure for universities and businesses to set out clear criteria for eligible provision under the levy, based on evidence on future skills needs and an understanding of what credible, high-quality providers can offer”.
Joe Marshall, NCUB’s chief executive, called on ministers to consider how “barriers” still hindered the creation of university-business partnerships “at the scale required” to meet the national skills shortage.
“We are calling on the government to partner with universities and businesses to foster greater collaboration on future skills in higher education,” said Dr Marshall, who added that “policies should streamline national skills systems, enable regulators to support university programmes that meet both job market needs and student interests, and encourage university-business partnerships”.
