The Apprentice Levy Scandal

News that uptake of apprenticeships has slumped by 59% since the introduction of the Apprentice Levy is a scandal that should both concern and enrage manufacturers.

Nearly a quarter (23%) of levy-paying firms have no understanding of the Apprenticeship Levy or don’t know how their company will respond to it.
Nearly a quarter (23%) of levy-paying firms have no understanding of the Apprenticeship Levy or don’t know how their company will respond to it.

The goal of the Levy was to boost apprenticeships by 3m by 2020.

The fact that this poorly-thought through initiative has thrown the whole enterprise into violent reverse is a terrible commentary of the ability of government to come even close to understanding how business works.

The process is unwieldy, bureaucratic and young people’s hopes of apprenticeships are being doomed as a consequence.

With the unveiling of the government’s industrial strategy by the Prime Minister, manufacturers should be even more alarmed at evidence that the state is incapable of making a positive difference to our national quest for greater productivity.

This does not mean government has no role at all. Government, through Innovate UK, funds the HVM Catapult, whose members are some of the most inspired and inspiring drivers of change in the sector.

As Rab Scott of the AMRC at Sheffield told me today, they are already doing many of the things that the Making Smarter report from the Industrial Digitalisation Review recommends, but are minded now to think more deeply about engaging with local and regional actors to become even more effective.

This is true across the sector. Government nudging of all these moving parts – and funding to enable – it is welcome.

But if the government is suggesting a layer of Whitehall-base infrastructure, above and beyond what already exists, to manage the industrial strategy then we should all be afraid, very afraid.

Access to advice, networks and funding must be as transparent and easy to navigate as a connected supply chain. Indeed, it must be frictionless. (The word ‘frictionless’ is becoming popular in government, to describe their hopes for a future EU trading relationship. One suspects they have no idea what it really means.)

The most successful businesses are those adept at successfully sidestepping this, or any other system, to glean the best and avoid the worst. Some, for instance, are really making the Apprentice Levy work for them, by setting up their own training academies, getting them Ofsted accredited, then recycling their own Levy payments to pay for it.

This is a cheeky bright spot in an otherwise dismal tale of good intentions turned to ashes by failures of vision and execution.

With the Industrial Strategy on our immediate horizon, we suggest UK manufacturing’s report to government is C- Must try harder. Much harder. And quickly.