The Apprenticeship Levy reform – our policy recommendations

03 August 2023

The Apprenticeship Levy was introduced by the government to incentivise employers to recruit more apprentices from a diverse range of groups and invest in training programmes to nurture talents and build the skilled workforce they need.

However, the system was designed in a very rigid way with complex requirements established in a top-down manner from the government. This denies opportunities to employers and apprentices alike.

There is a strong feeling among our members that a more flexible system would lead to better outcomes. A reform to the scheme is needed to increase the number of apprenticeships, support more young people into the programme and broaden the skills that are taught in the trainings and needed to ensure business growth. With this in mind, we have developed a plan for reform:



Lack of flexibility in timings

The length of qualifying apprenticeships is set in a top-down manner and is too inflexible.

The duration of programmes – set at 12 months – does not allow skills to be delivered at pace to adapt to evolving challenges such as the transition to net zero.

More flexibility on timings

Enabling businesses to develop short, targeted programmes to meet future needs would allow them to be more strategic in the way they develop their employees.

Businesses should be allowed to deploy funds over a longer period than the 24 months (currently proscribed on a “use it or lose it” basis) to allow them to respond to their local needs.

Issues around process and delivery

The process which needs to be followed to establish a new apprenticeship is too long and complex.

Availability and quality of training providers and opportunities varies across the country, this locks out talented people in some areas from accessing the opportunities our members can provide.

Some of the systems used to draw down and assign funding are onerous and not conducive to effective business planning.

More flexibility in provision

Supporting options like blended learning and bringing the Higher National Diploma into the scope of the levy would support businesses to create more opportunities.

Limiting perceptions

Myths persist that apprenticeships are only for entry level roles and school leavers, and this acts as a barrier to people upskilling to adapt to new challenges.

Embedding professional qualifications in a role brings higher costs when compared to standalone qualification programmes.

The system does not support reskilling for ambitious workers because training programmes are tied to the role they are currently in.

Promoting apprenticeships

Government can play a key role in promoting apprenticeships as essential to lifelong learning and the development of business skills for a changing economy.

Employers should be able to create apprentice positions for new roles where they can demonstrate a need either for the business or the development of the individual.

Different systems across the nations

Firms struggle to roll out programmes across the whole of the UK because of the different systems run in different jurisdictions.

A commission of the nations

The UK government should work with its counterparts in Belfast, Cardiff and Edinburgh to set out a clearer framework for the apprenticeship levy and its objectives which would support businesses to make more investments in skills across the UK.

Moving forward, we will continue to engage with stakeholders and policymakers to promote this simple and effective plan to deliver greater flexibility and enable our members to create opportunities across the UK.

More information about our policy positions can be found in our ‘Enabling growth across the UK 2022’ report or by contacting us.