Make the Apprenticeship Levy more flexible to increase UK economic growth

Recently we submitted a representation to the Treasury’s Spring Budget 2024 where we called for the Apprenticeship levy to be made more flexible, to enable its use for upskilling and reskilling, especially for micro-credential courses.  Our recent Sustainability Skills and Digital Futures surveys raise clear concerns over skills gaps and their negative industry and economic consequences.

In broad terms, we argue that unused levy funds, which are currently returned to the Treasury, could be used to train up to 280,000 workers in cutting-edge skills, for example linked to the Government’s 5 critical technologies.  This could boost the UK economy by over £1380m.  It would also support the Government’s Science and Technology framework, which we are pushing to be kept, whoever is next in power.  Consistent and continuous underpinning support for engineering skills is essential for economic growth and prosperity. 

What’s your experience of using the Apprenticeship levy?  Would greater flexibility enhance delivery in your organisation?  Would it alleviate skills shortages?

Let us know your views.

Read the IET’s full Spring Budget representation below.


  • The Apprenticeship levy will not be changed by this government. The skills minister Robert Halfon makes that clear here calling it the Ronseal Levy.

    I think also the IfATE will also be resistant to any change as it would undermine their control of technical education development.

    Another option I can think of, with the intension of being flexible although not directly related to the Levy, even though that is now becoming more restrictive is the LLE (Lifelong Learning Entitlement), which IMO is a "cop-out" as it saddles debt onto individuals to upskill for their employers (bit like the green deal for home owners), because the courses have to (a) be Ofqual regulated and (b) badged up via the ifATE like HTQs, so the number of viable micro credentialing options will be vastly limited due to the associated complex assessment processes. 

    In my discipline area currently to upskill above Level 3, I have to use a combination of commercial short courses and learning from the US as there is virtually nothing referenced via apprenticeship standards \ regulated Ofqual qualifications that deliver the micro credentialing style L&D that is needed or generally accepted around industry except for the likes of C&G 2382,2391,2396; which fits mine or my employer skills needs. Therefore, I couldn't even use the LLE if I wanted too based on those conditions. Note there is a Level 4 standard in my discipline area but it is niche so employers in certain sectors like mine are completely unaware due to obscurity perpetuated by their associated sector skills bodies etc.

    I think, even if the Apprenticeship Levy was allowed to be more flexible like the principles behind the  LLE, as I said what would I use it on? I think fundamentally the process of developing core competency modules needs to be changed. I raised these points in the Catch 22 skills thread

    To summarise, I feel so frustrated because in a general sense, I can't see how more people can develop at Level 4,5 & 6 sustainably in certain streams of engineering like mine, because (a)there aren't the applicable courses linked to any apprenticeship standard or HTQ that employers want other than HNC's or degrees which are generally too big and I question some of their content relevance for industry and (b) its likely if people wanted to, they will need to put their hands in their "own" pockets even with the LLE to do further relevant learning from sources outside the UK where they see a benefit in their workplace, as even the current commercial courses "if these ever satisfy the requirements from the IfATE" are limited, because we can't incentivise further development in them as the means to drive demand, due to the restrictive and complex assessment criteria i.e. flexible Levy or LLE.

    We have created a monster here, all the way back to the Richards Review, some principles make sense but the whole thing needs a serious overhaul if we are ever going to truly leverage the human capital in this workplace.


  • Thanks Lee, you raise some very useful points that highlight issues with current training provision.  Noting your points about the Government's position on apprenticeships, what particular changes would you like to see, both in terms of the structure / spread / funding of apprenticeships, and the entitlement to LLEs, so as to make training provision more responsive to the needs of learners, employers and a changing economy?  This would also take into account the sustainability agenda and the Government's focus on 5 critical technologies.  I'd be very interested in hearing your thoughts.    

  • Thanks Lee, you raise some very useful points that highlight issues with current training provision.  Noting your points about the Government's position on apprenticeships, what particular changes would you like to see, both in terms of the structure / spread / funding of apprenticeships, and the entitlement to LLEs, so as to make training provision more responsive to the needs of learners, employers and a changing economy?  This would also take into account the sustainability agenda and the Government's focus on 5 critical technologies.  I'd be very interested in hearing your thoughts.    

  • Hi Andrew,

    Thanks for getting back on this, and based on your bio and what you could achieve through lobbying it gives me a little faith that change maybe possible.

    So I found the references about the 5 critical technologies interesting detailed below for people like "me" who do not know

    I'll be honest, maybe at a macro strategic level i.e. governmental level, these are critical but for companies in my sector i.e. Engineering Construction etc. I am aware of and work for, these are not really on the agenda at the cold face, as we need to deal with the existing skills gap and provide structured opportunities to new starters or people who would like to retrain within my sector who could then at some point in the future consider these critical technologies.

    So for me it's all about reset. This also feeds into the sustainability piece i.e. sustainability of the workforce because I see countless job listings for job roles with essential skills in my discipline area that cannot be filled!

    So lets start with Ofqual.

    In my sector i.e. Engineering Construction as I said the sort of micro credentialing or short course offering which are timebound that most engineers undertake are not Ofqual regulated.  Why is that? Are these courses not to a standard? If so why are employers demanding them but they aren't regulated. Clearly there is a disconnect. I imagine the issue is that the process for regulation is too arduous but yet employers are seeking people with these types of core competency. I'll give you an example. TUV Rheinland (OK not UK derived but well recognised) offer a course in machinery safety that is certified see the link

    This micro credentialing course is vital for compliance and to uphold standards but I can't use the LLE for this and there is no apprenticeship standard all the way to Level 7 that contains equivalent learning and I could go to an employer and say "hey I am certified for machine safety under apprenticeship standard xyz, see my apprenticeship cert." but if I'm FSEng in this, no problem where there is a job requirement and like with SIS Functional Safety there are plenty job offerings requesting this.

    Please note as I'm sure you know core competency is not competency, but this is what employers want, where they work in a field related to this need. Cyber Security really illustrates this point if you google it.

    So how are Ofqual going to be more agile and inclusive. This for me is the start if we are using very structured ways of competency development.

    Then IfATE.

    So basically speaking a trailblazer group defines an apprenticeship standard with EPA, this should get signed off by the IfATE and can then get ESFA funding from the levy. Well I think that is the straight forward way of doing it....

    But the process in reality is so long winded. There is some much red penning / tape etc. in the name of quality that happens from reading between the lines. People give up. yes there are nearly 700 standards. But again in Engineering Construction in my discipline area we have one Level 3 MOET which ironically when the route review was done was considered for the chop, one Level 4 as I said niche and a Level 7 that cannot get off the ground.

    How is this allowed to happen?

    Why are the IfATE not proactive in seeing ridiculous levels of demand for jobs in my sector and not better supporting trailblazers?

    I still think the standards need to include more micro credentialing but the IfATE are dead against this as it leads to drop out because EPA is perceived too difficult, so when people get their "tickets" during an apprenticeship they give up.

    There is a link between EPA and final quals coming in but that wouldn't apply to micro credentialing throughout. EPA their connection to an apprenticeship need to be better understood with workshops and face to face sessions during the apprenticeship not just towards the end. Maybe the training providers need help. But someone needs to do something.

    Thinking about the EPA I wonder how effective it is. Apprenticeships in the past utilised assessors through the duration of the apprenticeship. These assessors were developed from the colleagues who worked with the apprentices in the organisation or at least that was my experience. I understand why independent assessment is needed but have we gone too far. Were people who did the old style really that bad because  effectively organisations marked their own homework. I don't think so. This is how I did mine and now I'm writing all this. Clearly my training must have developed me to inform my analysis now.   

    On another point I do have my suspicions about the makeup of trailblazers i.e. are they really the right people not just HR personnel which might be contributing to the problem but the ifATE multiplies that effect with their long winded processes "for quality purposes" and inherent complexity.

    Also HTQ's don't currently make sense either. OK the LLE could be used for those but they are basically the old BTEC HNC's/ HND's and Foundation Degrees. They didn't need rebadging, again it just makes things more complicated. Also going back to our example of machinery safety has anyone ever compared content with industry recognised courses and ensured (a) they cover similar content and (b) push for recognition. PS I'm not sure if this is a T Level+ scenario i.e.  no funding for anything with BTEC in the title even through its worked for 30 years! 

    If there is no industry recognition  why would anyone other than someone from school even pick an HTQ. Alignment is key here. People with experience of the job are key here. They are out there, why are we not engaging with them and ultimately integrating our learning offering using their experience.

    I think quite simply the IfATE needs streamlining, its need its own Richards Review with proven and respected SME's for the routes. I look at the Engineering and Manufacturing route and some of the occupational maps don't even make sense. So are the route panels effective. Because the IfATE appears challenging are they even attracting the right people on the route panels. Remember the people who know are working full time jobs with current experience. If they aren't then they probably aren't the right people for those panels. So the process of route review should be different, engage more, be more inclusive and ultimately agile in getting the definitions right in terms of standards and progression routes using the right people..

    So to sum up, If we get Ofqual more agile in regulating recognised courses in industry assuming this is the only way to use levy or LLE money and we get standard development and deployment with minimal effort using a streamlined and agile processes including reducing the minimum 12 months requirement and being flexible around off the job training this might work.

    So for example a person completes the machinery safety learning then undertakes tasks that re-enforce that learning related to appropriate KSB's defined within an associated standard which used current practicing SME's to develop in a short space of time with template support from the IfATE leading to a small EPA "a kind of micro apprenticeship for want of a better word",  then I think this could be attractive to employers, employees and create a sustainable workforce especially for upskilling. This then goes that the  LLE could be used in the same way.

    I'm not saying we ditch full 4 year apprenticeships but we broaden the offering remembering the IfATE processes should be similarly streamlined and agile for a full apprenticeship in the same vain as the potential "micro-apprenticeship" 

    I hope this gives you a flavour of my thoughts in this area and where I feel things can be improved ultimately benefiting the employer and employee. 




  • Thanks Lee

    You make a lot of very valid points.  There’s got to be a valid connection between the funding available to employers / employees and the range of courses on offer, in ways that meet industry needs, now and in the future.  This requires correlation and greater inclusivity over the regulatory approaches, industry integration and recognition, subject matter, level and duration (micro-credentialing to full apprenticeships) with agile delivery, timing and means of assessment.

    Without such a flexible offer, industry shortages will continue and are likely to grow (eg. as new sustainability / digital technologies develop), placing UK industry at a disadvantage when compared to competitors.

    I don’t foresee any changes to Government policy around apprenticeships / LLE in the near future, though that won’t stop us continuing our campaign.  But there are signs of greater openness to alternative thinking about training from other parties.  We intend exploring and building our links with politicians with a view to influencing future policy in this area.

    Point taken about the 5 critical technologies.  The Govt (via its development & funding agencies – Innovate UK, ARIA, EPSRC, Catapults etc) see these as key technological / economic areas for resourcing (as do others round the globe), but it doesn’t mean to say that they are the only ones (eg cyber and digital twins aren’t mentioned though they’ll play a key part underpinning other technological developments).  Also, each area needs defining very closely to ID the particular niches where UK PLC has / can gain a competitive advantage.  Eg no point in competing directly with TSMC in established mass semiconductor markets.