London Councils raises concern over ‘inflexible’ apprenticeship levy

Concern has been raised by London Councils over the government’s new levy to boost apprenticeship opportunities in the UK, saying that the policy’s lack of flexibility could lead to councils not being able to spend their allocation and it being “reabsorbed” by government after two years.

The levy, which came into effect on Thursday 6 April, will require employers in the UK with an annual wage bill of over £3m to pay 0.5% into funding apprenticeship schemes.

Money raised in the levy is expected to double the current investment in apprenticeships in England to £2.5bn by 2019-20 compared to figures from 2010-11. Smaller employers with a wage bill of under £3m will not have to pay for the levy as the government will cover 90% of the costs of training and assessing apprenticeships.

Previously, the IFS had warned that government targets to create three million apprenticeships by 2020 were ‘cavalier’ and may just encourage employers to rename existing employment schemes to fall in line with targets.

Cllr Peter John OBE, deputy chair of London Councils and executive member for business, said that whilst London Councils were pleased that the government is allowing levy funds to be transferred between employers from next year, the proposal to cap it 10% is too small for those employers, like London boroughs.

He said: “We remain concerned that this lack of flexibility will lead to London employers being unable to spend their allocation, resulting in funds generated in London being reabsorbed by government after two years and spent elsewhere.

“Instead, London government want to see a ring-fenced share of the capital’s apprenticeship levy devolved to help us increase starts at higher levels, build capacity with SMEs and work with employers to identify gaps in apprenticeship standards.

“We look forward to having the opportunity to make this case as part of future discussions on devolution with government following the recent announcement of the devolution memorandum of understanding.”

Skills minister Robert Halfon commented that there had never been a more important time to invest in skills in people and businesses, and that the levy would create a fairer system that will offer opportunities to a variety of young people.

“Our apprenticeship levy is a massive part of this,” Halfon said. “More than 90% of apprentices go into work or further training, and the quality of on-the-job training on offer will make sure we have the people with the skills, knowledge and technical excellence to drive our country forward.

“Building an apprenticeship and skills nation is essential in ensuring that we have the home-grown workforce we need in post-Brexit Britain to address the skills shortages facing industry and give everyone the chance to succeed.”

Union TUC also added its support to the introduction of the levy. General secretary Frances O’Grady said that it was “good news for workers,” as more will be given the chance to build vital skills required to break into well paid jobs.

“Unionlearn, the TUC and trade unions across the UK are looking forward to working with employers to make the expansion of good quality apprenticeships a success,” O’Grady stated.

Teachers call for levy exemption

However, teaching unions did not give an equally glowing assessment of the new scheme. Dr Mary Bousted, general secretary of the Association of teachers and Lecturers (ATL), warned the government that the levy could actually threaten the existence of smaller council-maintained schools if it was enforced on them.

“It is unacceptable that the Department for Education has given schools insufficient time to prepare for the levy - clarity about the impact on local authority maintained schools and communications to head teachers and governors has been too little, too late,” she said.

Dr Bousted also raised concern that schools would have appropriate roles for apprentices to enable them to recoup their levy payment for training.

“With teachers dealing with excessive workloads, there is little capacity to ensure the apprentices are properly mentored within schools,” she said.

And Russell Hobby, secretary of head and deputy head teachers’ union NAHT, said that the levy would come as another cost to schools who were already struggling with maintaining education standards under a £3bn funding blackhole.

“We know that schools have been making difficult decisions to make their budgets balance. We know that they are running out of things to cut without impacting on the quality of education provided,” Hobby said. “This additional cost from today, compounded by the fact that many schools will not be able to make use of the training opportunities provided because of the nature of education, is a further unwelcome cost for schools.”

Hobby stated that schools needed the same exemption from the levy that academies were currently offered, a measure also recommended by the LGA at the start of the year.

“If not, small maintained schools will unfairly face yet more costs,” he claimed. “This hard-headed assessment is crucial if the government is to truly start to understand the real cost pressures schools face.”

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here.


There are no comments. Why not be the first?

Add your comment



public sector executive tv

more videos >

latest public sector news

November too late for pay cap decision, GMB says

25/09/2017November too late for pay cap decision, GMB says

The GMB has criticised the government’s choice to defer the decision of ending the public sector pay cap until the Autumn Budget on 22 Nove... more >
LGA: TfL Uber decision shows need for ‘urgent reform’ of outdated taxi laws

25/09/2017LGA: TfL Uber decision shows need for ‘urgent reform’ of outdated taxi laws

Councils have this week declared that outdated taxi laws need to be urgently reformed following Transport for London’s (TfL’s) decisi... more >
Councils falling short of preventive care obligations

22/09/2017Councils falling short of preventive care obligations

Councils are failing to meet their obligations to prevent, reduce or delay the need for care as set out in the Care Act 2014. New research p... more >

editor's comment

14/08/2017Time for reflection

A lot has happened since the last edition of PSE was published. In particular, the snap general election delivered an astounding result that many of the pollsters and political experts could not have predicted when Theresa May initially called for it back in April. Chris Painter, Professor Emeritus at Birmingham City University, provides ... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >
View all News

the raven's daily blog

How would local government look under a Labour government?

25/09/2017How would local government look under a Labour government?

Few will disagree with the statement that the current landscape of local government is one that has been shaped by seven years of Tory influence. Harsh austerity measures have seen pressures on council-run services, as well as the NHS, mount sharply as demand increases. The resurgence of the Labour Party in June’s snap election... more >
read more blog posts from 'the raven' >


Support for councils following Grenfell

04/09/2017Support for councils following Grenfell

Ian Moore, CEO of the Fire Industry Association (FIA), discusses the wider lessons of the tragic Grenfell Tower fire and what measures and assess... more >
A quiet revolution

04/09/2017A quiet revolution

Dermot Ryan, programme director at NHS Digital for the Health and Social Care Network (HSCN), talks to PSE about the importance of moving to the ... more >
Effective leadership in uncertain times

04/09/2017Effective leadership in uncertain times

Dr David Beech, lecturer in people management at Salford Business School, argues that continuous renewal and progress is fundamental to effective... more >
Refocusing professional development

04/09/2017Refocusing professional development

Graeme McDonald, managing director of Solace, discusses the importance of taking time out to focus on learning, especially in the ever-changing l... more >


‘The HSCN is the realisation of industry best practice’

30/06/2017‘The HSCN is the realisation of industry best practice’

Keith Smith, public sector business development manager at Virgin Media Business, tells PSE’s Luana Salles that health and social care orga... more >
HSCN: The enabler for a more joined-up public sector

26/06/2017HSCN: The enabler for a more joined-up public sector

Mark Hall, Chief Assurance Officer at Redcentric, discusses NHS Digital’s project, the new Health and Social Care Network (HSCN) and what b... more >
Maintaining the momentum for further devolution

25/04/2017Maintaining the momentum for further devolution

Ahead of this year’s mayoral elections, Lord Kerslake, the former head of the Civil Service, tells PSE’s David Stevenson why the argu... more >
New social care funding misses the point

13/04/2017New social care funding misses the point

Clive Betts MP, chair of the Communities and Local Government (CLG) Committee, reflects on the social care funding released in this year’s ... more >

public sector focus

View all News