On 3 December, FE Week reported on a presentation in which a senior representative of the Institute for Apprenticeships included a slide with the projected costs of apprenticeship starts in England this year and for each year up to and including 2020-21. The paper estimated from the slide that the levy budget is set to be overspent by £0.5 billion this year, rising to £1.5 billion during 2021-22 and the IfA gave the paper the following statement on the presentation slide: “It highlighted that there is currently no unspent levy and showed it is possible that, given the positive uptake of apprenticeships, there could be a situation in the future where levy contributions may be insufficient to cover the full cost of apprenticeships” (see the slide here: https://feweek.co.uk/2018/12/03/levy-budget-bust-government-agency-warns-of-imminent-apprenticeship-over-spend/).
Association of Employment and Learning Providers chief executive Mark Dawe said:
At last it slips out into the open what we have been anticipating for months and what we predicted from the start, that more higher level, expensive apprenticeships are consuming the bulk of the levy.
We are now heading to a situation where there will be no money left for SME employers when the government is launching a £5m promotion campaign to the very same group, so with the cat out of the bag, we now need an open debate on how the levy operates. AELP believes that this underlines why a separate £1bn a year budget for non-levy employers is urgently needed along with access to the £10bn annual funding to HE. We need a proper open debate.
AELP fully recognises that the apprenticeship programme operates within a finite budget which cannot meet unlimited demand from employers of all sizes. However it believes that the government should be resisting the temptation to go for mostly supply side solutions. Instead AELP has put forward a series of recommendations to manage demand which include different rates of co-investment according to the level of apprenticeship. These proposals can be found in this submission here: https://www.aelp.org.uk/media/2625/submission-54.pdf.
AELP represents over 800 training providers who train 3 out of every 4 apprentices in England.