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Economy & Infrastructure Committee

The Apprenticeship Levy: One Year On (pdf)

Published: 24th August 2018

“We have found that some of the challenges and concerns we identified a year ago in our initial report have yet to be fully resolved. There are still questions around communication and engagement with employers of all sizes, the portability and relevance of qualifications and the level to which all employers in Wales feel supported to develop and grow new staff.” – Committee Chair, Russell George AM (Con, Montgomery)

The apprenticeships levy was introduced by the UK Government in 2015 to fund apprenticeship places. All employers with a wage bill of £3million+ are required to pay the equivalent of 0.5% of their wage bill.

The Committee undertook an inquiry on the levy which reported back in May 2017, while they also undertook a separate inquiry into apprenticeships (in general) which reported back earlier this year.



1. Communication has improved but needs to improve further

Many employers – around 700 employers in Wales are liable to pay the levy – told the Committee that they were still unsure about some aspects of it. Welsh Government engagement has increased since the last inquiry, with the Minister for Welsh Language & Lifelong Learning, Eluned Morgan (Lab, Mid & West Wales) saying the government were in contact with around 400 of those companies.

FE Colleges said apprenticeships still needed to be pushed as a career option, and the Welsh Government have committed to providing an improved “employer toolkit”.

2. Employers are confused by cross-border issues

Some aspects of how apprenticeships are delivered are incompatible between the nations of the UK; in England, the standards were said by the FSB to have been developed by large companies which have led to less portable “company-specific standards” being adopted compared to the more portable, broader “framework” approach in Wales.

The Welsh approach was said by the Minister to be less complicated that England, with 30 frameworks compared to 546 in England – yet some employers in Wales have still chosen to deliver apprenticeships through the English system because of what they consider to be a lack of flexibility.

3. The Apprenticeships Levy has had an “unintended consequence” on police funding

Welsh local authorities paid £18million in levies in 2017-18 and the NHS Confederation said that due to the size of the public sector in Wales there’ll be a disproportionate impact on public bodies.

There’s a particular impact on the four Welsh police forces. Training and apprenticeships are devolved, but policing isn’t. The police forces contribute £2million a year to the levy, but because of the nature of devolution they’re not getting any of that money back from either the Welsh or UK governments and it comes as all new police officers will require a degree-level apprenticeship.

The Welsh Government argue that there’s no agreement for them to fund the training of police officers and they believe as a non-devolved responsibility it rests with the UK Home Office.

The Home Secretary, Amber Rudd MP, didn’t respond to the Committee’s inquiries and talks between the two governments were said to be ongoing.