The apprenticeship levy should be replaced with a “Learning for Life” guarantee, according to a new report published today by business body the CBI.

The report, Seize the moment: an economic strategy to transform the UK economy, calls on the government to “free up money trapped in the apprenticeship levy so that business can invest in everyone’s lifelong learning”.

The report says: “To accelerate progress, we suggest: replacing the apprenticeship levy with a ‘Learning for Life’ guarantee, which would unlock trapped levy money for employers to spend more on training. 

“[And] extending the Lifetime Skills Guarantee to those holding a level 3 qualification that has lost value over time and who need to retrain in a new sector.”

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The Lifetime Skills Guarantee was introduced by the prime minister last year and allows adults to gain a first level 3 qualification for free. The guarantee forms part of the government’s Skills and Post-16 Education Bill, which was formally presented to Parliament.

Call to scrap the apprenticeship levy

The bill is at the heart of the government’s reform ambitions for the further education and skills sector, and contains plans on a range of issues, from employer engagement to government powers when it comes to institutions that are struggling or are seen to be failing to meet “local need”. 

It also covers the new local improvement plans, the functions of the Institute for Apprenticeships and Technical Education, and changes to previous legislation on higher education and lifelong learning.

Tony Danker, director-general of the CBI, said: “This country will never have a greater opportunity to transform our economy and society for the better than we have right now.

“This is the moment where we have a genuine chance to make big bets on how the UK economy will grow and compete. To use that appetite to invest, to collaborate globally after a decade of protectionism. 

“To lift thousands of young people out of limbo, so they can reach their potential. And to build on that bond between employers and employees closer than ever before.

“We have a grand plan for the whole nation. On the face of it, you might think that only some firms can benefit; we see prizes for everyone. 

“I know we have much to worry about in the short run. The Covid-19 crisis is far from over. It’s not easy for many trading in a new regime with the EU. Many firms have a lot of debt and uncertainty about the future. But we know from crises that new realities are shaped.”

Jane Hickie, chief executive of the Association of Employment and Learning Providers, said: “If CBI are saying that there should be a standalone apprenticeship budget for SMEs, then we support them because we have been calling for it for a long time. 

“The latest optimistic bounce-back forecasts for the economy mean that the levy could come under the same spending pressures which we saw before the pandemic and therefore some form of reform is needed. 

“However this needs to be a measured debate with government rather than a knee-jerk policy response based on the fact that the levy hasn’t been spent simply because workplaces have been closed.”

DfE spokesperson said: “Now, more than ever it is vital that people can get the skills they need to get good jobs and employers can access the skilled workforce they need to thrive. That is why we have put transformation of skills, training and further education at the heart of our recovery plans and our Skills Bill .

“The levy will continue to play a vital role, ensuring employers of all sizes can invest in high-quality apprenticeship opportunities that will  support our economy recovery.

“Through our Lifetime Skills Guarantee, we are already offering almost 400 free courses as well as Skills Bootcamps to help more adults gain the skills they need to get great jobs. We will also introduce a Lifelong Loan Entitlement that will open up opportunities for more people to study flexibly across their lifetime at colleges and universities.”