Through the new ‘Growth and Skills Levy’, the Government has signalled its desire to rebalance funding towards young people and entry-level training opportunities. While critics are keen to present the Government’s proposed shift away from funding Level 7 apprenticeships (equivalent to a Master’s degree) as worsening social mobility and employer flexibility, former government adviser Tom Richmond presents novel analysis that challenges these concerns – and puts forward a set of recommendations that prioritise the best interests of apprentices and taxpayers.
KEY POINTS
- The Growth and Skills Levy will be designed to offer employers more flexibility, while helping to redirect money towards apprenticeships for young people – which will be funded, at least in part, by reducing spending on Level 7 apprenticeships.
- In this paper, through new data obtained from the Department for Education for the 2023/24 academic year, the hypothesis that Level 7 apprenticeships boost social mobility is empirically tested for the first time. The main findings include:
- 1 in 6 apprenticeships are now taken by university graduates.
- An estimated £431 million of apprenticeship funding was used up last year by university graduates, including £182 million for graduates starting Level 7 apprenticeships.
- Management courses for existing staff that have been rebadged as ‘apprenticeships’ used an estimated £150 million of funding last year.
RECOMMENDATIONS
- Young people and adults who are already qualified at Level 6 (equivalent to a Bachelor’s degree) or higher should be banned from accessing levy-funded apprenticeships.
- Management training courses should be removed from the apprenticeship system and funded as non-apprenticeship training within the Growth and Skills Levy.
- Employers should be expected to pay up to 50% of the costs of non-apprenticeship training in future to encourage them to identify training courses that offer the best value for money.
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