Labour to announce replacement for apprenticeship levy

The Government is to replace the apprenticeship levy with a reformed growth and skills levy.

The Prime Minister will announce the move at the Labour Party’s annual conference on Tuesday.

He is expected to say that the new skills levy will offer greater flexibility for employers and learners, including through shorter duration apprenticeships in targeted sectors like construction.

Employers groups have been critical of the apprenticeship levy for years and have been calling for it to be reformed.

The new levy will be developed in consultation with employers, training providers and Skills England, the organisation established by the Prime Minister and Education Secretary Bridget Phillipson days after the formation of the Labour government.

The Prime Minister will also announce the development of new, foundation apprenticeships that offer pre-apprenticeship training to young people who are not ready to start a level two or three apprenticeship.

The Prime Minister is expected to say: “We’ll get our skills system right.

“We’ve got to give businesses more flexibility to adapt to real training needs and also unlock the pride, the ambition, the pull of the badge of the shirt that young people feel when building a future, not just for themselves but for their community.

“So we will introduce new foundation apprenticeships, rebalance funding in our training system back to young people, align that with what businesses really need.

“The first step to a youth guarantee that will eradicate inactivity and unemployment for our young people – once and for all.”

The Apprenticeship Levy was launched by the Conservative government in 2017, for employers with an annual wage bill of more than £3 million.

Affected employers paid 0.5% of their payroll each month as a levy tax with the aim of investing in apprenticeships, but employers complained it was too inflexible.