AELP warns Growth and Skills Levy ‘vacuum’ risks employers reducing training investment

The Association of Employment and Learning Providers (AELP) has today warned that a lack of detail in government plans to introduce their new Growth and Skills Levy risks creating a vacuum resulting in a reduction in skills investment.

AELP has received multiple reports of employers pulling back training investment in a range of sectors in the belief that levy reform is imminent. Unless this is tackled swiftly, it will lead to a reduction in apprenticeship starts as well as training being held back in the belief that a more flexible levy will cover those costs later in the year. This could put both apprenticeship starts and wider training investment at risk, jeopardising the government’s growth mission.

AELP is urging the government to work closely with the Shadow Skills England body to urgently set out a roadmap which signals to employers how quickly the current Apprenticeship Levy will be reformed and what levels of funding flexibilities may be introduced.

Simon Ashworth, AELP Deputy CEO and Director of Policy, said:

“We are deeply concerned that a lack of information about plans to reform the Apprenticeship Levy is now creating a vacuum. We are now seeing employers choking off investment in skills in the belief that levy reform is imminent and will be wide ranging. This is leading to the belief that all sorts of training could soon be covered by the levy, leaving employers holding off on critical skills spending. Labour quite rightly didn’t commit to the 50% flexibility of the levy in their manifesto, as without additional investment this would have a catastrophic impact on the apprenticeship programme.

AELP is leading the way having met with employers and providers to discuss this issue. We simply can’t afford to wait until the fiscal events this autumn. We urge the government to send a clear early signal to employers by setting out a roadmap and timeline for the introduction of the Growth and Skills Levy – including indicating what flexibilities to fund programmes other than apprenticeships might be available to employers and when.”