Apprenticeship Levy

Oral Answers to Questions — Education – in the House of Commons on 24th June 2019.

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Photo of Richard Graham Richard Graham Conservative, Gloucester

What recent assessment his Department has made of the effect of the apprenticeship levy on the number of apprenticeships.

Photo of Anne Milton Anne Milton Minister of State (Education)

I am very aware of the number of apprenticeships, but comparing numbers before and after the reforms we have made is a bit like comparing apples and pears, because we have put quality at the heart of apprenticeships. The number of people starting on the new employer-designed standards in the first half of 2018-19 has increased by 79%, which is an indication of the quality. An apprenticeship must now last for a year, and there must be 20% off-the-job training. There has been an increase of 10% in apprenticeship starts in the first half of 2018-19, compared with the same period in 2017-18.

Photo of Richard Graham Richard Graham Conservative, Gloucester

I am grateful to the Minister for that answer, but chambers of commerce such as Business West do not think that the two-tier system is working as well as it could. Specialist Gloucestershire Engineering Training believes that more funding for small and medium-sized enterprises would enable them to train more engineering apprentices. Does my right hon. Friend agree that that is something the Treasury should look closely at in the autumn spending review?

Photo of Anne Milton Anne Milton Minister of State (Education)

We are determined to make the apprenticeship system work for small and medium-sized enterprises, and smaller businesses get 95% of their training costs paid. We will move smaller businesses on to the apprenticeship system: we want to do that well and smoothly to make sure that we make it work for them.

Photo of Vincent Cable Vincent Cable Leader of the Liberal Democrats

Can the Minister explain why very good companies with generous apprenticeships and training schemes are making a net contribution to the Treasury through the levy scheme rather than being rewarded through tax relief or in other ways?

Photo of Anne Milton Anne Milton Minister of State (Education)

Those decisions were made some time ago. They have enabled us to make sure that by 2020 spending on apprenticeships will have more than doubled since 2010.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Education)

My felicitations on your first decade in office, Mr Speaker. Onwards and upwards!

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Education)

Indeed. We are hearing about the ups and downs of funding for apprenticeships, but the National Audit Office told the FE Ministers in March in no uncertain terms that there was a clear risk that the apprenticeship programme would now be financially unsustainable. The Institute for Apprenticeships and Technical Education has said that it could be overspent by £0.5 billion this year. The Minister told FE Week in January that she thought that the apprenticeship budget would be “alright until July”. July is next week. Does she still think that?

Photo of Anne Milton Anne Milton Minister of State (Education)

Contrary to what the hon. Gentleman has previously said, the apprenticeship system is working well, and levy payers in particular—and also small businesses —are grabbing at the opportunities that apprenticeships offer. I am aware of the budgetary pressures on the system and we will make representations ahead of the spending review on that point.