Staffing is currently a critical issue for organisations in almost every sector. Shortages of workers with necessary skills mean employers are struggling to recruit and retain high-quality staff at virtually every level. The looming recession seems all the more likely if businesses can’t access the human resource to meet market demand in many parts of the economy.
This makes it extremely concerning to have seen so little focus by the government on the education and skills sector since Boris Johnson left office. The current and continued political turmoil gives me huge concerns that one of the greatest challenges to business will go unaddressed.
It was however reassuring to see the Labour Party take the lead on this issue by setting out some of their plans to address these skills shortcomings, which affect the ability of businesses to cope with the economic challenges. The government must now rise to this agenda if we are to maintain an appropriately skilled workforce. What I found the most eye-catching element of the Labour Party’s statement was: Turning the apprenticeship levy into a growth and skills levy and allowing levy payers to use 50 per cent of their funds to pay for non-apprenticeship training.
It is clear that the Apprenticeship Levy needs to be reformed. Whilst it works well for some sectors and jobs, it is barely used in others.
One of the main reasons that employers fail to adopt apprenticeships is the rigidity of the Gateway rule: that a learner must be on-programme for a minimum of twelve months and a day before progressing to their end-point assessment.
The rule means that training programmes lasting less than a year do not qualify for levy funding. Employers and their staff are unable to fund a wide range of shorter training courses that could be of huge value to their business and the wider economy. This could include supporting the development of digital, green, and leadership and management skills, even basic employability skills to transition entry-level recruits into the workplace more effectively. Programmes to upskill staff in these areas are increasingly essential, and offer rapid and tangible benefit to businesses.
The Labour Party’s proposal to allow 50 per cent of levy funds to be used for shorter, more flexible training interventions seems better suited for regular, ongoing upskilling in the dynamic business environment we all face.
Employers and their staff are unable to fund a wide range of shorter training courses that could be of huge value to their business and the wider economy
The concern that allowing large employers to use their levy contributions for non-apprenticeship training could lead to less apprenticeship funding being available for non-levy employers needs to be addressed. SMEs are the backbone of the economy and employ far more people than levy payers. Labour has offered reassurance that SMEs would not see any less funding. Also that they would “be able to reclaim 95 per cent co-payments on approved courses in the same way as they do for apprenticeships”.
Creating flexibilities which allow a greater proportion of apprenticeship levy funds to be spent on skills training – including modular courses – seems like a priority the government is overlooking.
Making the most of levy funds to pay for non-apprenticeship training would require a streamlining of the compliance burden on employers and providers. Expecting modular, shorter training courses to meet the same level of regulation as apprenticeships would make them impossible to deliver economically. A proportional approach will make this plan far more accessible.
On balance the Labour Party’s plan has merit, particularly the proposal for more flexible use of levy funds. Let’s hope that this prompts the government to release similarly tangible plans soon. I will be watching the Autumn statement like a hawk!