Labour government has proposed significant changes aimed at improving the UK’s skills and training landscape including the creation of a new body, Skills England and the reform of the apprenticeship levy.

Skills England – A New Partnership Approach

Announced during the state opening of parliament on 17 July, Skills England will bring together government, training providers, businesses and unions to address the nation’s skills and labour needs. This initiative is described as having “partnership with employers at its heart” and aims to:

  • Identify Skills and Labour Needs: Collaborate across government departments to determine the skills required for the future.
  • Drive Training Opportunities: Promote and create training schemes aligned with economic demands.
  • Oversee National Skills Effort: Monitor skills trends and approve training schemes funded by the levy.
  • Engage with Devolved Nations and Skills Agencies: Work with various bodies, including the Institute for Apprenticeships and Technical Education (IfATE) and the Education and Skills Funding Agency, to streamline qualifications and training program approvals.

Skills England will inherit several functions from IfATE, specifically focusing on maintaining a list of accredited non-apprenticeship courses. This list will ensure businesses can use the levy for high-quality training programs.

Reforming the Apprenticeship Levy

The King’s Speech confirmed plans to reform the apprenticeship levy, aligning with Labour’s pre-election pledges. While specific details were sparse, the Labour manifesto highlighted the creation of a new, flexible “growth and skills levy.” Key points included a more adaptable system replacing the rigid current rules, making it easier to fund a broader range of training and skills development and reinstating traineeships, providing training, apprenticeships, or job-finding assistance for 18 to 21-year-olds.

The Chartered Institute of Personnel and Development (CIPD) welcomed these proposed changes, criticising the current apprenticeship levy for undermining ambitions and reducing apprenticeship starts since its introduction in 2017. Ben Willmott, head of public policy at the CIPD, praised Labour’s Youth Guarantee and the reinstatement of traineeships but called for bolder action to reverse the decline in youth apprenticeships. He emphasised that Skills England could play a crucial role in aligning training and development with business and learner needs.

Kate Shoesmith, deputy chief executive of the Recruitment and Employment Confederation (REC), also supported making the skills system more responsive to the labour market. She highlighted the frustration among employers with the current levy rules and welcomed the proposal to fund modular courses and non-apprenticeship training.

Labour’s introduction of Skills England and the reform of the apprenticeship levy marks a significant step towards addressing the UK’s skills shortages and enhancing vocational pathways. For SMEs, this represents an opportunity to engage more effectively in skills development, ensuring their workforce is equipped for future challenges.