The Labour Government’s Growth and Skills Levy 

The incoming Labour Government have laid out plans to transform the Apprenticeship Levy into a Growth and Skills Levy as part of their broader strategy to enhance skills training across the UK. The aim is to give businesses the flexibility they need to train their workforce and deliver growth. The new initiative will allow businesses to fund apprenticeships and training programmes to develop their workforce.

At Corndel, as the UK’s fourth largest apprenticeship provider, we have an active voice chairing and participating in influential groups in the policy discussion. As such, we welcome the changes as greater flexibility will benefit employers and allow more employees to benefit from gaining new skills. The changes are likely to be gradual and we will partner with you throughout the roll out to support you in navigating the opportunity for your organisation.

We have designed this briefing to provide clarity and an informative overview to circulate internally to your stakeholders.

We will invite you to an event series where you can share with your peers. We plan to facilitate workshops on implementation and change management and provide you with practical resources to use in your organisation. Our Growth and Skills Levy programme will play a crucial role in ensuring we are all aligning our strategies with the real-world impacts of these changes.

Whilst we wait for more details from the new Government, what do we already know about the Growth and Skills Levy?

Funding Allocation

Under the new system, 50% of the Growth & Skills Levy will be reserved specifically for apprenticeships. Companies can then use up to 50% of their levy contributions for non-apprenticeship training such as shorter courses.

However, it is important to note that employers will retain the flexibility to allocate as much or all their levy towards apprenticeships as they choose.

For example, an employer can choose to allocate 80% to apprenticeships and the remaining 20% to new training opportunities. However, they would not be able to allocate 80% to new training opportunities and 20% to apprenticeships because of the 50% that’s set aside specifically for apprenticeships.

This ensures that employers can continue investing in apprenticeships while exploring new training opportunities.

Skills England

A significant development under the new proposals is the establishment of Skills England.

This organisation will be tasked with:

• Overseeing training initiatives: Managing the strategic direction and funding allocation for training programmes across the nation.
• Coordinating with employers and training providers: Ensuring that training programmes are closely aligned with the needs of the economy and job market.

Focus Areas for Shorter Courses

The Labour manifesto highlights a commitment to not only traditional apprenticeships but also to shorter courses designed to quickly upskill workers. These courses will focus on:

• Digital skills: Addressing the growing demand for tech professionals and wider digital skills across various sectors.

• Green jobs: Preparing the workforce for roles in renewable energy, conservation, and sustainable technologies.

• Healthcare: Expanding capabilities in medical, nursing, and allied health professions to meet public health demands.

Increase in flexibility: Businesses will be able to use funds for a wider variety of accredited training programmes.

Supporting skills development: There will be a focus on the sectors with the highest demand for skilled workers, therefore addressing skill shortages effectively.

Enhancing accessibility: Small and medium-sized enterprises (SMEs) will have better access to the funds needed for training apprentices.

As mentioned previously, we anticipate any changes to the levy to be gradual. While the proposal for a Growth and Skills Levy under a new Labour government suggests changes, these are geared towards making skill development more dynamic and aligned with future needs.

The Labour Party has indicated that they would consult with businesses to ensure that the reforms support the economic environment and the needs of the workforce. The aim is to enhance the training landscape, not complicate it.

As your trusted skills partner, speak to your Corndel Account Manager about the new Levy or other ways we can support you with upskilling in your workplace. Please look out for more from us on our Growth and Skills Levy event series.