The CIPD, along with other leading business bodies representing tens of thousands of employers and millions of workers, have written to the Chancellor, Sajid Javid, urging him to broaden the apprenticeship levy and allow employers to spend their levy funds more flexibly.

In 2017 the Government introduced the Apprenticeship Levy, alongside a raft of reforms to the system, in an attempt to increase the quantity of UK apprenticeships and raise employer spending on training. Yet as the CIPD’s recent report, Addressing employer under-investment in training shows, the policy has failed to halt the long-term decline in the volume and level of investment in work-based training in the UK. Less than a third of levy-paying employers report that it boosted their overall training investment levels. 

The survey also found that over a fifth of levy-paying organisations stated that they had used the funding on training that would have taken place anyway and 14% reported that it had directed funds away from other, more appropriate forms of training.

To ensure that the policy really does drive up investment levels, the letter sets out the need for a levy that allows businesses greater flexibility to fund training that is effective for both workers and employers. This would help to fill skills shortages, enable higher pay for workers and allow millions more workers to benefit from quality training and career progression opportunities. 

This call reflects the Chancellor’s own ambitions set out during his campaign for leadership of the Conservative Party, where he pledged to ‘‘broaden 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’’. 

Commenting on the letter, Peter Cheese, the CIPD’s Chief Executive, said:

“The apprenticeship levy is too inflexible and fails to encourage or create the best opportunities for employers to invest in the skills they need to boost the UK’s productivity and competitiveness. Our research shows employers want a more flexible training levy that supports investment in apprenticeships, as well as other equally important forms of workplace training and development.”

The coalition includes the Recruitment & Employment Confederation (REC), Chartered Institute of Personnel and Development (CIPD), Freight Transport Association (FTA), The Chartered Institute of Management Accountants (CIMA), Association of Accounting Technicians (AAT), the Association of Independent Professionals and the Self-Employed (IPSE) and ScreenSkills. They collectively represent employers, business owners and professionals across all sectors and regions of the UK.