Call for investment in skills through apprenticeship levy flexibility

  • Date

    Mon 10 May 21

Aerial view of our Colchester Campus

We're joining forces with other leading universities, students’ unions and businesses to call on the Government to invest in skills through greater flexibility in the use of apprenticeship levy funds.

A joint letter sent to the Government has been signed by the leaders of ten universities including Essex.

Other signatories include multinational companies, local enterprise partnerships (LEPs) - including South East LEP and student representatives including Essex Students’ Union President Molly Purcell.

They are recommending urgent action is taken to prioritise skills funding as the United Kingdom looks towards an economic recovery following the pandemic. The letter builds on the campaign led by the University of Essex to encourage the Government to do more to support students.

Writing to the Treasury and Department for Education which are responsible for the Government’s skills agenda, the joint signatories make the case for a time-limited broadening of apprenticeship levy funding to give extra support to people moving into the jobs market including new graduates.

The letter also calls on Ministers to look at proposals for companies to be able to use their unspent apprenticeship levy to tackle regional skills gaps in locally-led partnerships between businesses and educational providers.

The signatories represent five economic regions with distinct skills challenges, and the letter calls for flexibility so that local enterprise partnerships can decide on how best to invest in skills that are needed for those regions.

Professor Anthony Forster, Vice-Chancellor of the University of Essex and co-signatory of the letter, said: “We need the government to play its part in championing fairness between the generations. The wealth and opportunity gap between the young and old is already unacceptably large – and the impact of the pandemic on students and their life chances is amplifying existing challenges.

“The government must increase its support for this generation of students to deliver the extra help they need to transition to work or further study after graduation.

“For a second year in a row, all our students will be entering into a desperately challenging job market and our universities want to help. Funding for bite-size qualifications, aligned to urgent priorities for higher-level skills, would make an immediate difference and support the national recovery.

“Universities have played an important role during the pandemic and the government has an opportunity to harness this potential in partnership with universities.”

Students' Union Molly Purcell said: ‘The job market for UK graduates is becoming progressively more challenging – and after facing a uniquely difficult and disappointing year for most university students, it has been a time where students have not been able to develop their professional skills to ensure stable graduate prospects.
"This academic year has been profoundly difficult: from lockdown to lockdown, lack of in person teaching and a complete absence of the fundamental student experience: these opportunities for students have been minimal. The Government must act in supporting graduates as they enter the job market.’

The University of Essex is required to set aside over £500,000 annually via the Apprenticeship Levy, paid for by student fees. However, because of red tape and stringent conditions on its use, each year the University can only spend around £100,000, with the balance paid over to the government.

More flexibility in the rules would mean this resource could be redirected to support students in further training in the skills most in demand to drive our national recovery.

Full text of joint letter to the Government

Dear Chancellor, Secretary of State and Ministers,

We approach what we all hope are better days ahead following the huge human and economic cost of the global pandemic. As well as the tragedy of lives lost, the pandemic has widened existing divisions across society. Jobs and opportunities are scarcer and young people have been disproportionately affected.

As a group representing small, medium and large businesses, students, universities and colleges, we are committed to acting now to help those entering the job market and drive economic growth as we come out of the pandemic.

We welcome the Government’s Skills for Jobs white paper, and the ‘Building Back Better - Plan for Growth’ strategy which sets a course for economic growth and addressing skills and productivity gaps across the UK. We recognise that this is a critical moment for our country’s prosperity.

We know that across all regions of the UK there are stubborn skills gaps, made worse by COVID-19. Investment in skills is urgently required, yet billions of pounds of Apprenticeship Levy funds remains unspent, due to the inflexibility in a scheme which does not match current urgent skills needs.

As businesses, we are keen to invest further in our people, and boost skills among those entering or re-entering the workforce. Yet in the Thames Valley Berkshire region alone, there is in excess of £60 million of unspent levy that businesses are not in a position to use.

As representatives of students, universities and colleges, we know there are thousands of young people due to complete courses in the next few months who face an uncertain future.

The talent and enthusiasm of those young people could help drive the economy forward, but their opportunities into work are harder to access than ever.

We are conscious that the pandemic has been especially difficult for young people, who as well as having education and training interrupted, have been disproportionately affected by loss of part-time and casual work, as well as longer-term work and career opportunities.

We are proposing establishing a joint working group with Government to agree more flexible ways to use Apprenticeship Levy funding to boost skills in critical areas of need for our region now, when the support is needed most. If this can work in our region, we see every reason why it could benefit every region of the country, with specific focus on local needs.

Addressing the skills needs in our region means understanding where those gaps are, and as a group we are acutely aware of those needs. This might include:

Short bootcamp-style programmes that combine work experience, research and technical skills training and mentoring for key sectors where skills gaps exist; or

Skills programmes to provide talented individuals with additional entrepreneurial and leadership skills, leading to work with SMEs through a graduate scheme-style system.

We believe that those who are embedded and invested in their regional economies best understand what those key skills gaps are. Therefore, regional bodies such as Local Enterprise Partnerships (LEPs), which already work with central and local government, businesses and education providers, are well placed to represent the needs of regional economies and put forward adaptations to the use of the Levy which address specific skills gaps. Each LEP has identified the skills challenges faced by businesses and their local economy and through their Skills Advisory Panels can harness business and educators engagement to address those needs.

As we begin to build back our economy for the long term, we see good prospects for sustainable growth and jobs in our region, and across the UK. But we must make every effort now to help those entering the job market – particularly this generation of college and university leavers – to have opportunities to find work that also matches the needs of our regional economy. We look forward to working with you to achieve this aim.

Yours sincerely,

Professor Robert Van de Noort, Vice-Chancellor, University of Reading

Rachel Osborne, President, Reading University Students’ Union

Alison Webster, Chief Executive Officer, Thames Valley Berkshire LEP

Jim Morton, UK & Ireland Stakeholder Lead, Syngenta

Professor Anthony Forster, Vice-Chancellor, University of Essex

Molly Purcell, University of Essex Students’ Union President

Christian Brodie, Chair, South East Local Enterprise Partnership

Dr Miles Adcock, President at Teledyne and Chair Success Essex

Professor Adam Tickell, Vice-Chancellor and President, University of Sussex

Professor Julia Buckingham, CBE, Vice-Chancellor and President, Brunel University London

Anvitha Paruchuri, President of the Union of Brunel Students

Sir Paul Curran, President of City, University of London

Saqlain Riaz, President, City, University of London Students' Union

Professor Paul Layzell, Principal of Royal Holloway, University of London

Kate Roberts, President, Royal Holloway Students’ Union

Professor Frances Corner OBE, Warden, Goldsmiths, University of London

Professor Karen Cox, Vice-Chancellor and President, University of Kent

Professor G Q Max Lu, Vice-Chancellor and President, University of Surrey

Professor David Richardson, Vice-Chancellor, University of East Anglia