Keir Starmer announces new Foundation Apprenticeship at the Labour Party Conference

New foundation apprenticeships announced by the Prime Minister

Prime Minister Sir Keir Starmer has announced new Apprenticeship reforms at the Labour Party Conference. With new Foundation Apprenticeships created for young people. Starmer also highlighted that there will be more flexibilities for businesses. He highlighted that apprenticeship starts often went down for entry level roles, whilst visa applications for the same skill areas goes up. He highlighted that the Youth Guarantee will eradicate youth unemployment once and for all.

Prime Minister overhauls apprenticeships system to support opportunities for young people

• Growth and skills levy launched, giving more flexibility in how businesses fund apprenticeships
• New foundation apprenticeships being developed to give young people a foot in the door, along with shorter apprenticeships in some areas. 
• Inaugural Skills England report also published today, highlighting critical importance of government skills agenda to future economic growth.

The government is boosting opportunities for young people through ambitious apprenticeship reforms in England.

The Prime Minister Sir Keir Starmer and Education Secretary Bridget Phillipson announced today a new growth and skills levy which will replace the existing apprenticeship levy and include new foundation apprenticeships.

These new apprenticeships will give young people a route in to careers in critical sectors, enabling them to earn a wage whilst developing vital skills.

The new levy will also allow funding for shorter apprenticeships

The new levy will also allow funding for shorter apprenticeships, giving learners and employers greater flexibility over their training than under the existing system – where apprenticeships must run for at least 12 months.

The training eligible for funding under the new levy will develop over time, informed by Skills England’s assessment of priority skills needs. 

The Department for Education will set out further details on the scope of the offer and how it will be accessed in due course.

More Levy funding directed to younger workers, instead of Level 7 Apprenticeships

To fund this, employers are being asked to rebalance their funding for apprenticeships, asking them to invest in younger workers. This will also involve businesses funding more of their level 7 apprenticeships – equivalent to a master’s degree and often accessed by older or already well qualified employees – outside of the levy.

The first report from Skills England, the government’s new body for the skills system, has also been published today. It provides an initial assessment of the nation’s working skills, as well as future skills needs and gaps which employers are struggling with across the country.

The report has found that employer investment in training has been in steady decline over the past decade, with training expenditure at its lowest level since records began in 2011, with investment per employee down by 19% in real terms. This highlights the need for government reforms to the skills and apprenticeships system.

It also shows that, across the UK, almost 1 in 10, or over 2.5 million roles are in critical demand, with more than 90% being in roles that require training or education. 

The government launched Skills England in July to help identify skills needs. Skills England will play a crucial role in determining which types of training will be eligible for the expanded growth and skills levy and will set out shortly how they will work with stakeholders to inform their advice to DfE. 

The need for jobs and skills varies across industries, with the health and social care sector experiencing the highest demand, followed by education, manufacturing, and science and technology.

Sector Reaction to the Apprenticeship reforms and New Foundation Apprenticeships

Responding to the Prime Minister’s speech on apprenticeships reform at Labour Party Conference, Stephen Evans, Chief Executive of Learning and Work Institute (L&W), said:

“Reforming the apprenticeship levy should be part of tackling our perennial underinvestment in skills. Apprenticeship numbers are down 34% since the introduction of the apprenticeship levy and other reforms, with young people bearing the brunt. We’ve argued for greater flex for employers to invest in valuable training outside apprenticeships, but only if they invest more in apprenticeships for young people. We therefore welcome the principle of the levy being used for other types of training and redirecting investment as part of the Government’s Youth Guarantee, though we await the detail.

“The Government needs to be careful that reforms don’t compromise quality. The 12-month minimum duration for apprenticeships is a somewhat crude measure, but the Government should be cautious about removing this: in other countries, apprenticeships last much longer. Similarly, we need more pre-apprenticeship training, but any new foundation apprenticeships need to be more than employability training to be called ‘apprenticeships’. We await the details of the Government’s plans to judge their impact on widening opportunity and improving outcomes.”

In response to the government’s announcement on the growth and skills levy, David Hughes, Chief Executive, Association of Colleges, said:

“The significant drop over the last six years in young people starting an apprenticeship and the shift away from apprenticeships in vital sectors and regions shows that reform of the apprenticeship levy is long overdue. I’m therefore pleased to see this early action from the new government to start to focus levy funds where they are most needed: at young people seeking to enter the labour market, and in priority areas, such as construction, digital and green skills. Where employers truly value those Level 7 apprenticeships then I hope that they invest their own money in them, showing that they provide a good return on investment.

“With the establishment of Skills England, I hope to see more interventions like this, using public funds to invest in key priorities, in line with the Labour commitments to economic growth and widening opportunities. We have long called for these key priorities for the levy to be set nationally and regionally. When it was introduced in 2018, one of the drivers for the levy was that employers were investing too little in skills and in their workforces. That is still true, so there is more to do to encourage, support and enable employers to invest more through colleges who stand ready to deliver on this vital drive for sustainable economic growth and breaking down barriers to opportunity.”

L&W’s Head of Learning for Young People, Nicola Aylward:

“The focus on young people in the Prime Minister’s announcement is promising. We’ve seen a considerable drop in apprenticeship starts by young people over the last seven years, while latest data show that the numbers locked out education, employment or training has risen to alarming levels. Combined with skills shortages across the economy, this paints a worrying picture of a disjointed and inadequate skills and employment system that holds back economic growth and young people’s life chances.

“Pre-apprenticeships are currently a missing part of the system. The Government should learn lessons from the previous traineeships programme and ensure that new support is part of a clear and integrated pathway to apprenticeships for young people. L&W has long called for a Youth Guarantee, which will ensure that all young people can access a job, training place or apprenticeship. Pre-apprenticeships can play a valuable role in breaking down barriers to opportunity and enabling young people to bridge the gap to employment.”

No “youth guarantee” without more college funding, says UCU

Labour must give college teachers a pay rise to meet its “youth guarantee” said the University and College Union (UCU) today (Tuesday), in response to Keir Starmer’s speech at Labour Conference.

UCU general secretary Jo Grady said: ‘We welcome Keir Starmer’s desire to get young people into good jobs, but you cannot skill up the next generation so long as college workers are severely underpaid.

‘College teachers earn much less than their counterparts in schools. If Labour is serious about its youth guarantee, it needs to resolve this pay disparity. Labour’s decade of national renewal will be impossible without huge public investment in colleges and universities, the foundation stones of growth and innovation.’

CBI RESPONDS TO PRIME MINISTER’S SPEECH AT LABOUR PARTY CONFERENCE 2024

Rain Newton-Smith, CBI Chief Executive, said:

“The Prime Minister is right to say that government is facing challenges too complex to resolve alone. The ‘shared struggle’ to put the country back on the path to prosperity serves as rallying call for a partnership between business and government that harnesses the innovation, investment, and optimism of industry to deliver lasting change.

“Businesses will welcome the Prime Minister’s commitment to sustainable growth as the ‘north star’ of government. By focusing on the vision and clarity behind his government’s ambitions, particularly through the Industrial Strategy, the Prime Minister is starting to sharpen our pitch for global investment whilst driving momentum on the obstacles to growth. Backing for a new Growth and Skills Levy is an important step to achieving those goals.

“After more than a decade of lost productivity, its only through the public and private sectors working together that we can build a stronger economy that improves living standards, empowers communities and helps the country compete on the world stage.”

Ben Rowland, Chief Executive of AELP, said:

“We are pleased that the Prime Minister used his speech today to ensure apprenticeships are front and centre of government policy to fill our skills gaps. Today’s announcement sees the government take on board a range of key AELP asks ahead of the Autumn Budget – including introducing flexibilities to apprenticeships such as reducing the 12-month minimum, and reviewing maths and English requirements, the latter of which AELP has campaigned long and hard for.

“We are also pleased to hear that the new Growth and Skills Levy will allow Foundation Apprenticeships, another concept that AELP proposed, and we look forward to continuing to work with officials in its effective design and subsequent implementation. Funding all of this through the removal of government subsidy on the majority of level 7 apprenticeships is disappointing though. While it may not be surprising given underfunding throughout the apprenticeship system, this could have been avoided if the £800m gap between the amount taken in by the Apprenticeship Levy, and the actual programme budget was plugged – or even by looking at an alternative funding model.”

Azlina Bulmer, Managing Director of the IMI said:

“Currently, the automotive training workforce is severely under-resourced, and the pipeline of new talent is not being adequately filled by new apprenticeships. The Labour Party proposed a Youth Guarantee to provide access to training for all 18- to 21-year-olds which the IMI hopes will include a focus on the automotive sector.

“The automotive industry is a mainstay of the UK economy, and social infrastructure providing 866,000 jobs and £37 billion GVA in 2023. With 21,000 vacancies and critical skill gaps in EVs and ADAS, urgent support is needed to maintain road safety and meet government targets. The IMI will work closely with the relevant ministers and departments that will influence future education, skills and automotive policies, representing the interests of our members and the wider road-using public to ensure UK automotive remains a global leader.”

David Smith, CEO at Lifetime said

“With the plans set out in today’s speech, the Labour government is following through on their commitment to reform an outdated levy and shift the balance of the skills landscape towards greater equality of opportunity, whilst ensuring the system works for employers. 

“At Lifetime, we particularly welcome the focus on engagement with the sector and the formation of Skills England, and on flexibility on course duration. By refocusing apprenticeship policy to better support entry level apprenticeships and access into these through Foundation courses, we will support social mobility nationally whilst enabling growth in key sectors for the UK economy.

“Now that we have these commitments from the top of Government, we await further detail from Skills England as the remit develops, as well as confirmation on funding during next month’s Budget.”  

Gareth John, Director at First Intuition said:

“At First Intuition we welcome the prospect of shorter duration apprenticeships and Foundation Apprenticeships to help prepare young people for full apprenticeship programmes. In the accountancy sector the requirement for apprenticeships to last at least a year has been a significant blocker to uptake of the valuable level 2 standard. In such a highly competitive labour market firms who want to recruit the best talent are reluctant to slow down the development of their most ambitious candidates. This is unfortunately depriving young people in entry-level roles from developing much-needed employability skills at a time when organisations are putting an increasing premium on them.

“What is concerning is the talk of “rebalancing” apprenticeship spending in favour of younger people by restricting employer levy spending on level 7 training. In the accountancy sector well over 70% of learners on level 7 programmes are aged 24 or below. Our level 7 learners are young people! And most of them are working in entry-level roles. Of the minority who are aged 25 or above a good proportion are school leavers who have successfully progressed from levels 2 and 3 towards full chartered status. Level 7 apprenticeships must not be thought of as exclusively for older, higher earning workers. They form an important part of an apprenticeship progression pathway that has been a huge part of breaking down barriers to opportunity in the accountancy profession.

“Overall, the existence in a desirable sector like accountancy of accessible apprenticeship programmes from level 2 to level 7 can continue to support the huge advances in social mobility and diversity that we have seen in the profession since the introduction of the levy in 2017.“