Would reform of the Apprenticeship Levy be the right thing to do? - Dr Mandy Crawford-Lee

Unfortunately for many businesses across Yorkshire, the compulsory contribution of 0.5 per cent to fund the levy - by employers with payroll costs of over £3m - was met with some understandable resistance. Since its introduction, it has been regarded as another form of business taxation and this opinion largely hasn’t changed during what has been a tough economic period. It has been viewed even less favourably by those firms which pay the levy but don’t take on apprentices.

So, what benefits could reforms bring? There have been calls for the scope of the levy to be extended beyond apprenticeships. However, I’d always argue that it should first and foremost be used to fund them.

Another major stumbling block, widely viewed as in need of reform, is that any unused levy funds expire after 24 months and return to the Treasury, creating further employer dissatisfaction. Since its introduction, almost £2.7bn of funds raised by the levy has been retained by or returned to the Treasury and not spent on apprenticeships. We’d urge employers across the region to explore all opportunities to upskill their workforce via an apprenticeship. Extending the length of time levy funds are spent by employers could also surely be reviewed?

If more levy funds are collected than are used to pay for apprenticeships, then excess funds should be used to pay for other nationally recognised skills programmes and not put back into the government’s coffers. The use of excess funds to provide greater support and incentives for SMEs to engage apprenticeships could also be considered.

There is a danger that some of the suggested reforms go too far. For example, employers should be aware that there have been numerous calls to restrict spending on certain types of apprenticeship and types of learner.

Since the introduction of the levy, there have been calls to restrict employers’ use of levy funds on apprenticeships for older workers, for individuals earning above a certain salary, for employees with a degree, or for apprenticeships at higher levels. Such measures, if introduced would cause havoc with the apprenticeship system, undermine its focus on productivity and social mobility, as well as severely restricting employers’ ability to use the apprenticeships their organisations needed. Imagine the NHS not being able to use its levy payments to train a nurse simply because the individual had a history degree or was aged over 24.

It's clear to see that some degree of reform is needed but also clear that it should not be at the expense of diluting the levy’s original purpose and reducing apprenticeship support.

Dr Mandy Crawford-Lee is chief executive for the University Vocational Awards Council (UVAC).