Devolution needed to make apprenticeship system work

With close to nine in ten businesses in the capital not currently employing apprentices, the LCCI and London Councils have called for a fully devolved apprenticeship service for London – something that new research shows business supports.

The research comes from the organisations’ ‘London Business 1000 Survey’ based upon Savanta ComRes polling of 1,000 London business decision-makers about the skills and recruitment challenges their companies face. Two years on from the introduction of the Apprenticeship Levy, only 13% of businesses in the capital say that they currently employ apprentices, down from 17% in 2018.

Confusion

The survey results show that confusion persists within the business community regarding requirements to pay the Apprenticeship Levy and use of apprenticeship funds. Nearly a fifth of those surveyed did not know whether their business is required to pay the levy, whilst over half of those paying the levy don’t employ any apprentices.

69% of businesses surveyed do not expect to use apprenticeship funding this year, whilst amongst those using funding only 16% said they plan to use more than half available to them (down from 28% in 2018) – clear signs of a system in need of reform.

LCCI Chief Executive Peter Bishop commented: “Over half of businesses who currently try to recruit in London encounter difficulties finding candidates with the right skills. In this climate apprenticeships should play more of a vital role than ever, yet our research with London Councils shows that only 13 per cent of London businesses currently employ apprentices.

“This is a clear sign that the system isn’t working as it should. It’s both too inflexible and confusing for businesses and as a result is failing many London businesses and residents.

“Business believes that a fully devolved system is the solution. And until we get that, the national system needs immediate reform.”

Freedom

Councillor Clare Coghill, executive member for business, Europe and good growth at London Councils, said: “This year’s survey continues to show that the apprenticeship levy is not working for London and that businesses overwhelmingly back boroughs having more freedom, which would enable local government and business to work together via a London Apprenticeship Service.

“Across the board, London businesses are also hugely supportive of greater devolution to address a whole range of the city’s most pressing issues such as housing, transport and community safety. We will continue to work with the LCCI to make our case to government for greater devolution. Business agrees that Whitehall needs to give London and other UK cities the powers, freedoms and budgets to support vibrant, inclusive economies.”

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