The UK's leading employer bodies call for Apprenticeship Levy to be opened up

An open letter to the Chancellor

The Recruitment and Employment confederation has pulled together a coalition of business organisations, representing tens of thousands of employers and millions of employees, to write (see below for text) to the Chancellor of the Exchequer, Sajid Javid MP, urging him to enable employers to spend their levy funds more flexibly and allow millions more workers to benefit from quality training and opportunities for career progression.

Where are the High Tech Employers?

This call is far more important to the economic future of the UK than the extra Government funding for Further Education but the consortium does not appear to include the CBI and Tech UK. Do their members still give priority to retaining the ability to import supposedly skilled staff from the rest of Europe and/or India over working to create UK skills frameworks, for standards as well as funding, that are employer driven and fit for purpose? If so, one cannot really blame them. They spent over a decade after the Sector Skills Councils were created trying to get Government to allow supposedly employer-driven programmes to be driven by employers, free from the narrow constraints imposed by the academic advisory boards of national funding and standards councils, agencies and regulators.

It is time to make a public fuss

I remember a meeting in 2004 convened by the personnel director of the UK’s largest software and service employers and twenty of his peers (plus a TUC representative), where they said that unless Government started listening to them they would walk away from its skills programmes. They would not make a public fuss. They would continue to “go through the motions”. But they would do what was necessary. Officials did not tell Ministers. Government did not listen. The industries overseas recruitment and offshoring grew rapidly over the next decade. Today it is fighting to retain “freedom of movement” and visas to allow the bulk import of those for whom digital apprenticeships were supposedly intended.

The referendum vote meant Change or Die

I suspect that the members of the CBI and Tech UK still do not believe that making a public fuss to reform the UK skills system, the stranglehold of the “blob” (the term coined over twenty years ago for the hierarchies of advisory committees which make up the UK educational establishment) and enable change. I confess that until the unexpected result of referendum I too was among those working to try achieve via Brussels what we could not achieve via Whitehall. But the people spoke. The half who have not done well out of our membership of the EU, whose children do not got to University or who have returned home, unable to earn enough to live independently after paying their student debt, want change.

Time to halt the dominance of the Haldane Principle

We have been stick for far too long with education and skills processes and priorities administered by a self perpetuating oligarchy of committees following variations of the 1917 Haldane Principle . The “principle” was designed to “liberate” University research from the dictats of outside sponsors.  Despite half a century of criticism and calls for it to apply only to a limited proportion of government funded research, the principle was re-enacted in 2017 for programmes co-funded with industry.

It has also dictated the shape of our education system. The UK  is uniquely dominated by hierarchies of committees driving processes to  select and filter for academic excellence, alias the memory, logic and mental discipline needed for “pure”, as opposed to “applied”, research. That has led to UK Universities leading the world in measures of research excellence while they fail to provide the attitudes and disciplines (e.g. team working and creativity), let alone skills, needed by employees to develop innovative products, bring them to market and/or to grow them into a competitive business.

And heal the schism

The resultant tensions came to a head, when the majority of the UK voting against the advice of the intelligentsia who had denied them and their children access to the skills of future in favour of importing them from abroad. Then the students voted in favour of a pied piper pledge to scrap student loans and robbed Theresa Mayor her majority. The report she subsequently commissioned from Philip Augur highlighted , inter alia the social injustice of the current system.

The time has come for action to remove the obstacles to creating many more apprenticeships, including degree linked, and give hope to those trapped by student debt as well as to the next generation and those whose jobs are at risk if they cannot keep abreast of changing demands for skills. We need to be able head off calls for destructive revolutionary action that would delay constructive evolutionary change.

Who signed and Why

The coalition includes the two accountancy bodies (AAT and CIMA),  the Chartered Institute of Personnel and Development (CIPD), Freight Transport Association (FTA), Association of Independent Professionals & the Self-Employed (IPSE) and ScreenSkills (the body for the UK’s screen-based creative industries).

Mark Farrar, Association of Accounting Technicians (AAT) Chief Executive, said;
AAT has campaigned for the apprenticeship levy to be renamed the “Skills Levy” and broadened to include traineeships and other forms of high quality training since 2016. Widening the remit of the levy will help address the fall in apprenticeship starts, the frustrations of many employers and the future skills needs of UK plc.” AAT has around 90,000 student members, 20% of them apprentices, although not all within the meaning of the current levy.

CIMA’s Andrew Harding FCMA CGMA, Chief Executive – Management Accounting, added;
We must better support current workers to reskill and upskill throughout their careers. This is why it is essential that we review our national education and skills policies, especially the apprenticeship levy as it currently stands, expanding it to provide for reskilling and lifelong learning.

The Text of the Letter

2 September 2019

Rt Hon Sajid Javid MP
Chancellor of the Exchequer
HM Treasury
1 Horse Guards Road
United Kingdom

Dear Chancellor,

As representatives of tens of thousands of businesses, representing millions of workers from every corner of the UK, across all sectors and sizes of firm, we urge you to broaden the apprenticeship levy so that funds can be spent on other forms of accredited, quality training. We believe this approach would benefit workers, employers and the wider economy.

The levy was created with the best intentions, but its complex rules and single-minded focus on just one sort of high-quality training has limited its effectiveness as a policy. As well as a slower pace of growth for apprenticeships overall, opportunities for younger people and flexible workers have been particularly affected, in both the apprenticeship system, and in other high quality qualifications.

An effective skills policy has never been more important. It underpins productivity, opportunity and innovation. Our inability to address stubbornly slow productivity growth is undermining prosperity and opportunity in the UK. This will only get more important as automation, AI and market changes have large consequences for the future of work – something you have noted yourself. Ensuring that the UK workforce has the skills they need to be able to seize the opportunities presented by the fourth industrial revolution must be a shared priority.

During the Conservative leadership contest, you acknowledged the possibility of
“broaden(ing) the apprenticeship levy into a wider skills levy, giving employers the flexibility they need to train their workforce, while ensuring they continue to back apprenticeships.” We believe this would be the right step. A levy that allows businesses greater flexibility to fund accredited, quality training that is effective for workers and employers – rather than meeting a Government target – would be ideal. It would help to fill skills shortages and enable higher pay for workers.

At present, the levy system is actively damaging skills development in the UK economy at what is a critical time. We would be delighted to work with you and the Secretary of State for Education – to whom we have copied this letter – to urgently design an approach that will work for the Government, employers and workers.

Yours sincerely,

Neil Carberry, Chief Executive, Recruitment & Employment Confederation
Peter Cheese, Chief Executive, Chartered Institute of Personnel and Development
David Wells, Chief Executive, Freight Transport Association
Andrew Harding FCMA CGMA, Chief Executive – Management Accounting, The Chartered Institute of Management Accountants
Seetha Kumar, Chief Executive, ScreenSkills
Mark Farrar, Chief Executive, Association of Accounting Technicians
Simon McVicker, Director of Policy and External Affairs, The Association of Independent Professionals and the Self-Employed

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