MPs have warned that the government is risking “a policy trade-off” by setting a target of three million new apprenticeships by the end of the current parliament.
The target has been described as “blunt and arbitrary” in a report from the Commons’ Business, Innovation and Skills committee, headed by shadow industry minister Iain Wright.
It argues that it is counterintuitive for the government to set a quantitative target on industries to provide apprentices, while at the same time suggesting that the provision of skills must be employer-led.
It adds that the design of the proposed apprenticeship levy “must recognise that some businesses invest heavily in training and development”, but have a smaller proportion of apprentices because of less demand within the business.
The report recommends that government should “consult with industry to ensure that the apprenticeship levy is implemented in a such as a way as to allow sectors in invest in skills through different qualifications and training methods applicable to their specific needs”.
A new apprenticeship levy, announced in November’s Spending Review, will be set at a rate of 0.5% of an employer’s wage bill.
All employers will receive an allowance of £15,000 to offset against their levy payment, meaning that it will effectively only be paid by employers with a wage bill in excess of £3m. This could cost larger firms more than £1m a year.
The report also added that the three million apprenticeships target only focused on total quantity, rather than suggesting individual targets across different apprenticeship levels.
“The lack of this analysis reinforces the view that ministers have not given enough thought to how different types of apprenticeships can best fill the skills gaps that exist,” it said.
Government should also “do much more to address the management gaps” across industries, and should aim to promote “new degree-level apprenticeships in professional management” to do so.
The committee’s report also welcomed the introduction of the National Infrastructure Commission, and added that “transparency is crucial” for the body to attract private investment in the long term.
Conservative MP Mark Pawsey previously defended the bill, saying: ”It doesn’t seem to me to be anything wrong in the principle that those who benefit should contribute. So the business sector that benefits from the skills the apprenticeships bring to them should contribute.”
Original story in our sister title, Construction News