The apprenticeship system is still holding firms back because of the system’s “rigidity”, according to a new report.
A survey of 765 firms by Skills development organisation, City & Guilds, reveals that almost half want to use the money to invest in other forms of training such as professional courses.
City & Guilds say its research suggests that nine out of 10 levy-paying employers wanted greater flexibility in how they spend their apprenticeship allowance.
The apprenticeship levy, which was introduced in April 2017 requires businesses with an annual wage bill of £3 million or more to pay 0.5 per cent of this amount into a fund that can be spent on apprenticeships and other eligible training.
Kirstie Donnelly, Managing Director of City & Guilds Group, says: “The turmoil we are facing, as a result of uncertainty around Brexit as well as the rapidly changing world we live in, means that it’s never been more urgent to improve the skills of our workforce and invest in home-growing the skills that we may no longer be able to import from abroad.
“Apprenticeships have a huge potential to deliver on this, but the system is still not responsive enough to the needs of employers.”
She adds: “Businesses need more flexibility to use the apprenticeship levy in a way that will truly help them fill skills gaps, upskill their workforce and shore up their talent pipeline for the future. Although we welcome the government’s commitment to introduce reforms, they are yet to set this in motion.”