Apprenticeship Levy is hampering industrial growth, warns chair of UK Metals Council

This stark warning has been made by UK Metals Council chair Rachel Eade MBE, who is calling on the government to review the current system, urging the removal of unnecessary bureaucracy and ensuring that entry level apprenticeships benefit from the same level of funding as higher level qualifications.

According to Eade, over 10,000 jobs are currently available across UK foundation industries with little sign that these positions will be filled because a complicated training landscape is putting off training providers, companies and young people looking to enter industry.

Eade added that nearly £750m raised under the Levy last year was unspent and returned to the Treasury.

A letter on behalf of the 12 trade associations the UK Metals Council represents has been sent to ministers and MPs to highlight the issue and suggest a resolution.

“I’m not sure how we’ve got here, but we’re in a preposterous situation where employer funds are not being used for the intended purpose of upskilling staff from Level 2 upwards,” Eade said in a statement.

“The Levy should be an effective way of leveraging funds for the use of industry as a whole. Problems start when the money at the top of the tree does not trickle down or the funds are too difficult to access for manufacturers already struggling for time.”

Eade continued: “We’re calling on the government to urgently review the current system and look at four important improvements. Firstly, reduce the amount of bureaucracy involved, secondly widen the focus of the standards so they cover all engineering and manufacturing disciplines and thirdly ensure realistic funding levels for Level 2/Level 3 apprentices and the foundation skills that employers are crying out for.

“Finally, we must rebuild the engineering training provider capability in the UK. Giving them the level of funding they require to deliver the skills our sector needs now and in the future is vital.”

Since 2014, there has been a 34 per cent drop in the number of engineering and manufacturing apprenticeship starts, with 49,060 starting in 2021/22 according to a Fit for the Future report carried out by Engineering UK. The report also underlined a drop in those starting at Level 2, with 30,980 doing this compared with 63,250 nine years ago.

Eade went on to add: “The concept of truly employer-led apprenticeships, together with a fair levy system, is what we are asking for.

“Implementation of the present system is not working and needs to be refreshed, but not abandoned. The employer voice must be heard - at both a strategic and tactical level - and shape policy, so that the system recognises niche engineering and manufacturing skills.

“Trade Associations could also play a bigger role both in influencing policy, but also in the Endpoint Assessments. We have direct lines to so many companies, why not use them?

“We call on government to act now and enter into dialogue with manufacturing and agree to make changes that strengthens the sector by providing sustainable jobs for the future.”