Chancellor announces further changes to Apprenticeships

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Chancellor announces further changes to Apprenticeships

This week's announcement by the Chancellor contained a package of measures aimed at boosting apprenticeships. Speaking at the Conservative party Conference, Philip Hammond said:

“we have heard the concerns about how the apprenticeship levy is working so today we’ve set out a series of measures to allow firms more flexibility in how the levy is spent. But we know that we may need to do more to ensure that the levy supports the development of the skilled workforce our economy needs. So in addition to these new flexibilities, we will engage with business on our plans for the long term operation of the levy.”

Only 2 years ago the Government announced an overhaul of the apprenticeship system, introducing the Apprenticeship Levy along with a suite of changes to the courses, standards and organisations involved: it was the first concrete steps towards the government’s ambitious plan to create 3 million new apprenticeships by 2020. It’s fair to say that it hasn’t been universally popular, nor has it been particularly successful with apprenticeship starts falling and a mountain to climb to hit the 3 million target.

Ukie has consistently argued that in its current form the apprenticeship levy does not address the skills needs of the games and wider digital creative industries. The Apprenticeship levy is difficult to spend particularly when we don’t have the right high level apprenticeship standards in place (especially around technical skills) and the lack of flexibility in the system means the opportunities to upskill the workforce are being missed.

But do check out Next Gen Skills Academy who are working on games-specific standards. 

Until there is an appropriate number of standards available we have argued that the levy should be available to use for upskilling existing staff to plug shortages. What we are seeing is that the funds are being insufficiently used by games companies leading to further skills shortages down the line.

What’s more, ensuring that the design of the apprenticeship levy works for the games industry has gained increasing significance in a post-Brexit Britain where we are likely to face further skills shortages as a result of changes to free movement of labour laws.

In a bid to introduce much needed flexibility to the system, employers paying the levy will now be able to invest 25% of the fund on the wider supply chain (up from the existing 10%).

We are just clarifying with government what constitutes the "supply chain". We believe it would be useful for studios or businesses under the same family structure (ownership or investment) to be able to pass their vouchers on. 

There is also an additional £5m being made available to the Institute for Apprenticeships to invest in creating new standards and updating existing ones – widening the range of courses on offer. The announcement also included a commitment to consult with employers over the coming weeks on the operation of the levy after 2020.

The introduction of greater flexibility can only be a good thing, as is a shift towards greater emphasis on an employer led system and we look forward to seeing how these changes start to impact on delivery of apprenticeships.

Whether they go far enough is another question. We believe that Government should go further, widening the flexibility up to 50%, there needs to be a more efficient sign off process for standards and there need to be greater freedom in how the Levy can be spent. 

Check out our very own Digital Marketing apprentice, John, and his thoughts when he was a couple of months into the job.