New growth and skills levy refocuses apprenticeships

The UK government has announced a new growth and skills levy that will replace the existing apprenticeship levy and introduce new foundation apprenticeships.

Announced alongside the publication of the first Skills England report highlighting nationwide skills gaps, Prime Minister Sir Keir Starmer and Education Secretary Bridget Phillipson said revised levy will also fund shorter apprenticeships, giving learners and employers greater flexibility than the current 12-month minimum.

The training eligible for funding under the new levy will evolve over time, informed by Skills England's assessment of priority skills needs. The Department for Education will provide further details on the scope and access to these programs.

To fund these initiatives, employers are being asked to shift their apprenticeship investments towards younger workers. This will also involve businesses contributing more to level 7 apprenticeships, equivalent to master's degrees, which are often accessed by more experienced employees.

A new report from the government's Skills England body found that employer investment in training has steadily declined over the past decade, with expenditure per employee down 19% since 2011, underscoring the need for the skills and apprenticeship reforms.

The report also revealed that nearly one in 10 roles across the UK, more than 2.5 million, are in critical demand, with over 90% requiring training or education. Skills England will play a key role in determining eligible training for the expanded levy, collaborating with stakeholders, the government said.