Higher level apprenticeships set to lose funding in Labour revamp

Higher level apprenticeships are set to lose out on funding under Labour’s plans to revamp the apprenticeship levy, the prime minister has announced.

Confirming the levy – which sees large employers charged 0.5 per cent of their pay bill – will be expanded to become a wider “growth and skills levy”, No 10 said the new fund will focus on investing in opportunities for younger workers.

Businesses will be encouraged to fund more of their level 7 apprenticeships – equivalent to a master’s degree – outside of the levy as a result.

There has been criticism that levy funds under the old system have been used by businesses to fund training opportunities for older and more experienced members of staff at the expense of those just starting out in their careers. The levy will also allow funding for apprenticeships shorter than the 12-month minimum allowed under the current system.

Announcing the plans in his speech to the Labour Party conference in Liverpool, Sir Keir Starmer said: “We will introduce new foundation apprenticeships. Rebalance funding in our training system back to young people. Align that with what businesses really need. The first step to a youth guarantee that will eradicate inactivity and unemployment for our young people – once and for all.”

Cash-strapped universities had hoped the new skills levy could provide more funding opportunities but the move appears to favour colleges and providers that specialise in lower level apprenticeships instead. 

No 10 said the training eligible for funding under the new levy “will develop over time” and will be informed by an assessment of priority skills need being conducted by body Skills England, newly created by the government.

Speaking at the conference, education secretary Bridget Phillipson said she wanted to avoid putting skills and apprenticeship opportunities in opposition to universities and higher education.

“With universities, it sometimes drifts into a conversation around do we want more apprenticeships or skills training, although universities do that too, or do we want our universities to succeed?” she told a fringe event hosted by The Spectator magazine.

“I think, out there, people don’t see it in those terms, they want both, they want really good options where it comes to vocational training and skills and more apprenticeship starts for our young people which – by the way – is another failure of the last government where we have seen a massive drop-off.”

Asked whether university funding was an issue that was keeping her awake at night, Ms Phillipson said it was a concern, but she was also worried about other issues that get less attention, such as support for children with special educational needs.

“I know that universities are facing challenges, but they are independent institutions, they prize that independence and therefore they do have to consider how they make the numbers stack up and how they balance their budgets,” she said.

The education secretary told delegates that it was “not job done where it comes to university access” as “it is not 50 per cent of kids in Sunderland who go to university”, referencing her party’s former goal of ensuring 50 per cent of young people participate in higher education.

“A lot of the people who will say too many kids go to university, those people are usually people who have been to university themselves, let’s be clear about that,” she said.

“They then want to pull away those opportunities from other young people. I don’t think it is about one or the other. I think if you have got what it takes and you would benefit from the chance to go to university then you should be able to do so.

“I do find it really depressing that people who have benefitted from university and all that brings then speak often in such negative terms when it comes to working-class kids having the chance to have those same kinds of opportunities.”

tom.williams@timeshighereducation.com