As the 2023-24 academic year draws to a close, The St Martin’s Group reflects on the changing landscape of skills and apprenticeship policy.  

This has been another year of significant political change after Rishi Sunak’s decision to call an early general election for the 4^th of July. The Labour Party’s sweeping landslide victory saw the centre-left party return to Government for the first time in 14 years, bringing with it new ideas on skills and apprenticeships.

Looking back at the last year politically, and within the sector, there have been significant steps taken to tackle the challenges that exist and create a more effective system that works for learners, employers and the economy. However, this is also an important moment to reflect on the right path to nurturing an inclusive and wide-ranging apprenticeship system.

Apprenticeships

Data released by the Department for Education (DfE) earlier this month revealed a modest 0.4% growth in apprenticeships from August-May 2024. Meanwhile, the DfE underspent £17 million of its apprenticeship budget; without additional funding, there is little room for manoeuvre on how the budget can be spent. The slow growth of apprenticeships, despite increasing demand, will inevitably be an area of focus for the new Labour Government.

However, there have also been some positive strides within the sector; in October 2023, UCAS launched its apprenticeship service, to bring greater parity for schools in how they support students considering the next steps of their education.

Meanwhile, the DfE’s funding rules change for apprenticeships (which came into effect in August) introduces exemptions for English and maths thresholds based on clinically sound cognitive assessments. These rule changes also include quarterly reviews rather than monthly assessments, and the ability to screen apprentices at any time means they can provide support throughout their apprenticeship if and when necessary. These steps acknowledge the diverse challenges that learners with special needs face and help embrace a more inclusive system that supports rather than hinders apprentices.

Skills

The big development in skills policy following the general election is of course the introduction of Skills England, the new government agency, launched to unify the skills landscape. Whilst this will take between 9-12 months to set up, with a lengthy consultation expected, once in place it has the opportunity to create a coherent national skills policy which addresses the needs of regional economies and plugs the skills gaps currently plaguing employers across the country is fundamental to Labour’s mission.  

Additionally, the Government hopes that by replacing the Apprenticeship Levy with the Growth and Skills Levy it will be able to introduce a level of flexibility for employers, who will be able to use up to 50% of their contributions on non-apprenticeship training, to increase funding for broader skills training.

Looking ahead

We believe that the Growth and Skills Levy poses a fantastic opportunity to improve the skills system. However, its design will be vital to ensure that the changes have a positive impact on the supply of apprenticeships.

 To strengthen the system, protect quality, boost supply and support employers, the St Martin’s Group’s ten overarching design principles for a new Skills and Growth Levy are

1. Maintain the parts of the system that work and transform those that could work better
2. Build an inclusive all-age, all-level skills system
3. Ensure the system is employer led, gives choice, and is flexible to employer needs
4. Enshrine quality into every part of the system
5. Guarantee all levy funds collected are used for skills and a protected apprenticeship budget
6. Protect and ringfence the Levy for paid employees
7. Increase training for SMEs – recognising delivering training to SMEs is expensive
8. Incentivise employers to train more young people starting out in their careers
9. Make use of existing accredited qualifications where they exist (e.g. HTQs, VTQs) delivered by approved providers
10. Consult employers, providers and awarding organisations who use the system widely – employers seek certainty, consistency and simplicity

There have been positive strides over the last year to bring parity between apprenticeships and higher education for young people leaving school, and support apprentices within their apprenticeships. There have also been big political changes that bring with them big policy developments, including the Growth and Skills Levy. At The St Martin’s Group, we hope these reforms will support SMEs hire apprentices, value entry-level skills in addition to high-level apprenticeships, and embrace a broad, diverse approach to skills development.