The CIPD and Adecco’s autumn Labour Market Outlook, published in November, suggests that business uncertainty following the Brexit vote could already be having a negative impact on skills investment. In light of the vote, just 9 per cent of firms were planning to increase spending on skills development, with 15 per cent planning to reduce the current level of investment over the next three months. Reduced overall investment, combined with the possibility of limited access to skilled EU migrants, could be seriously damaging to the UK’s future competitiveness.

In the current Brexit context, there is a real need to take stock of the UK’s education and skills offer to make sure that our current and future workforces can deliver the economic growth we need. In particular, with the introduction of the apprenticeship levy now imminent (April 2017) there is an urgent need to ensure that the reforms drive quality over quantity and deliver the skills needed now and in the future.

Our previous research: Employer views on the apprenticeship levy, suggests that in its current form the levy could have damaging unintended consequences, undermining efforts to improve the quality of apprenticeships. Survey evidence, published earlier this year, found that nearly one-third (29 per cent) of employers planned to offset the increased costs of the Apprenticeship Levy by rebadging existing training programmes so they can be accredited as apprenticeships. Worryingly, the survey also suggested that the levy could also lead to employers to increasing the numbers of Level 2 apprenticeships (equivalent to five passes at GCSE), at the expense of Level 3 and above provision (equivalent to two passes at A-level), further devaluing the brand.

These findings were echoed recently by the influential Public Accounts Committee (PAC) who warned the government that the levy may encourage some stakeholders to behave in ways that will work against the objectives of the programme. The report noted that “employers and training providers might collude to recover and share levy funds while offering little or no genuine training, or employers might artificially route other forms of training into apprenticeships”.

The report was also highly critical of the process for introducing the new apprenticeship standards, stating that they were taking far too long too long to be signed off and that employers were having to invest considerable amounts of time. Of more concern, though, is the proliferation of, and quality of, the new standards. Earlier this year the National Audit Office reported that by 2020 there may be as many as 1,600 standards in place compared with 240 apprenticeship frameworks and that, of those currently produced, a large number of were narrow and overlapping, restricting the extent to which apprentices gain transferable skills.

This is a time where we need to be raising the status of apprenticeships, not pursuing a policy which could undermine it. Unless urgent action is taken to ensure that the system delivers quality the ‘brand’ could seriously suffer, damaging the value of the apprenticeship pathway in the eyes of young people, parents and employers. With the average graduate student now leaving university with £44,000 of debt and more than half of graduates ending up in non-graduate jobs, according to our research: Alternative pathways into the labour market, it is critical that apprenticeships offer an attractive, high skill alternative to university degrees.

Government, training providers and employers need to work together to ensure that the new reforms do not deliver quantity at the expense of quality. So, what needs to be done?

• All new apprenticeship standards should be reviewed to ensure that they deliver quality, with any narrow and overlapping standards removed. In particular, where Level 2 standards have been produced there should clear and justifiable rationale for their introduction relative to a Level 3 qualification;
• Government should consider adapting the levy into a more flexible training levy, with a proportion of funding earmarked for apprenticeships to decrease the risk of employers rebadging existing CPD training as apprenticeships or reducing investment in other valuable forms of training;
• There is a need for to create a better local infrastructure to support apprenticeships and raise demand for skills amongst employers. Local Enterprise Partnerships and Business Growth Hubs should be encouraged to work with the local business community, colleges and training providers to support and develop the creation of more advanced and higher level apprenticeships;
• The quality and availability of careers, advice and guidance should be improved so young people have better information about other non-graduate routes into the labour market.

Are you ready for the levy?

Despite widespread calls to delay the introduction of the Apprenticeship Levy, the Government is pushing ahead with its timetable and the levy will go live from April 2017. How is your organisation preparing? What challenges are you facing?

The CIPD are in the process of developing guidance for L&D and HR professionals on the levy and the role of apprenticeships in workforce skills development. We would like to speak to you to understand your experience of apprenticeships and how your organisation is likely to respond to the forthcoming levy. If you are willing to take part in this research please email e.crowley@cipd.co.uk, All interviews will be anonymous.