BCC Release: Apprenticeship System Reform Must Go Further

A new report from the British Chambers of Commerce is calling for the government to reform the apprenticeship system to make it fit for the 21st Century. 

As the UK celebrates National Apprenticeship Week, it finds that the current framework is too rigid, lacks clarity, neglects higher-level skills and is failing to meet the needs of business. 

Among the recommendations it makes to solve the problems are: 

• Reforming the Growth and Skills Levy to include funding for short modular training 
• Recognising spending on skills as an investment and delaying the introduction of a lower National Living Wage threshold. 
• Using vital intelligence from Local Skills Improvement Plans to future-proof the system. 
• Ringfencing funds from the Levy and Immigration Skills Charge for investment in training. 

The report makes extensive use of research and analysis by the BCC’s Insight’s Unit to support its findings. This found that while 67% of firms were facing skills shortages, more than half of them (52%) do not feel that current training options are plugging this gap. 

It also identifies that over a third of businesses (37%) say lowering the threshold for the National Living Wage from 21 to 18 will make them less likely to recruit younger people. 

And it finds that government changes to apprenticeships do not give businesses the flexibility they crave; with 61% of firms saying its reforms would not change their hiring plans. A further 19% said the changes would actually make them less likely to take on an apprentice. 

Kate Shoesmith, Director of Policy and Insights at the BCC, said: 

“As we celebrate National Apprenticeships Week there can be no doubt how truly transformational this training system is. Becoming an apprentice provides a direct route for young people into work, to earn and learn, while setting out a clear pathway for their future development. 

“For established employees they offer the opportunity to upskill, while remaining productive in their current role, a key reason that they remain attractive to employers. 

“But it has been clear for a while that the system has many flaws. Take up and completion rates have been falling, and some businesses have turned their backs on it. 

“The government has recognised it needs to stop this rot and shake things up. But its proposed reforms do not go far enough and lack clarity. 

“It is vital that apprenticeship levy funding is given a wider scope for training and that firms get better support to deal with the financial squeeze that the system brings. There is also a deep well of intelligence collected by Local Skills Improvement Plans that must inform the future of apprenticeships. 

“If our recommendations are enacted it could increase take up of apprenticeships on both sides and place the whole system on a much firmer footing going forward.”  

Matt Tudge, Head of Skills at Business West commented,

"From our work delivering Local Skills Improvement Plans (LSIPs) across the South West, the message from employers is consistent: the apprenticeship system is still too rigid to keep pace with how businesses actually grow and adapt.
 
Employers value apprenticeships, but they also need flexibility: shorter, modular training that can be stacked over time, aligned to real roles and emerging technologies. That’s especially true for SMEs, who make up the backbone of our regional economy and are often locked out by complexity and cost.
 
LSIPs provide a clear, employer-led evidence base on where skills demand is changing - from advanced manufacturing and digital, to green, defence and everyday economy roles. Embedding that intelligence into reform of the Growth and Skills Levy is essential if apprenticeships are to remain relevant for the next generation.
 
If government treats skills as a long-term investment, not just a compliance system, we can unlock higher take up, better progression, and a workforce fit for the future economy."