The 5% Club: Response to Philip Hammond, Conservative Party Conference

Lady Cobham CBE, Director General of The 5% Club

“We thoroughly welcome and support the government’s announcement today to introduce reforms to the Apprenticeship Levy, and are very interested to hear more about the £100 million funding for the National Retraining Scheme. We work with over 330 businesses across all sectors and size, all of whom are passionate about offering as many training opportunities as possible. However, since the introduction of the Levy, we have heard first hand some of the challenges our members have faced, and we have all witnessed the drop in the number of apprenticeship starts.

“We are therefore pleased that the government has listened carefully to employer feedback and that changes to the Levy are afoot. We are also encouraged that the government will engage and consult with employers going forward in how the Levy is adapted in the long term. Ensuring employers have access to adequate funds is key. Put simply, without these funds, businesses can’t employ the apprentices they need. Allowing greater flexibility for employers on how the Levy is spent is also incredibly important. The Levy itself was always visionary – it has the potential to play a pivotal role in reversing the trends of skills shortages and low productivity in this country. It also has the ability to ensure businesses have the opportunity to attract people from all backgrounds, the key to improving social mobility in the UK.

“Nonetheless, we all have an ongoing job to do to ensure that apprenticeships become the norm. We must push for a parity of esteem between traditional and vocational systems. If we can work together – the government, business leaders, employers and the education system – we can remove the barriers that currently exist to deliver the huge number of apprentices that employers and the economy needs.”

The 5% Club believes that the following issues should be considered as part of a wider consultation process around apprenticeships and the Levy:

  1. There must be an improved awareness and understanding of what apprenticeships are, what they offer and the levels available in order to address outdated perceptions that they are ‘second best.’ Effective careers advice should be offered throughout schools to ensure that all young people have an understanding of the range of jobs and industries they could work within;
  2. Expenses such as travel to training centres or paying for accommodation can make some apprenticeships untenable, particularly for those people who live in rural areas or simply can’t afford travel costs – companies should be allowed to use the Levy funds to cover these essential expenses;
  3. More support must be provided to smaller employers to ensure that they understand how the Apprenticeship Levy can benefit them. Many remain unaware of its value or view it as an initiative for larger businesses only and risk being left behind as a result;
  4. In a survey by The 5% Club, nearly half (47%) of members, mostly those working in specialist areas requiring specific skill sets, or those based in rural areas, said they are unable to find training providers for the skills or specialisms they were looking for;
  5. The Apprenticeship Levy should be evolved into a broader skills levy, with increased flexibility to allow it to be spent on other types of high-quality technical skills training;
  6. Funding for the Further Education sector needs to be stabilised. The FE sector needs a coherent strategy setting out a clear vision for the future to ensure that FE is up to the job. Low funding and a lack of investment in recent years is starting to affect the curriculum and quality of provision, and the number and quality of teachers;
  7. More must be done by the government to make a UCAS-style process for apprenticeship applications a reality
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