Starmer: Training system funding to be ‘rebalanced’ to aid the young gain skills

The Prime Minister told the Labour conference the Government wanted to give businesses more flexibility in training recruits.

Prime Minister Sir Keir Starmer has outlined changes to funding for training (Peter Byrne/PA) (PA Wire)

The Prime Minister has announced that funding for the training system will be “rebalanced” to help young people gain skills.

He told Labour’s annual conference that foundation apprenticeships will be launched as the first step to a “youth guarantee”.

He said: “We’ve got to give businesses more flexibility to adapt to real training needs.

“Rebalancing funding in our training system back to young people.”

The significant drop over the last six years in young people starting an apprenticeship and the shift away from apprenticeships in vital sectors and regions shows that reform of the apprenticeship levy is long overdue

David Hughes, Association of Colleges

There will be a new growth and skills levy which will replace the existing apprenticeship levy and include new foundation apprenticeships.

The new apprenticeships will give young people a route in to careers in critical sectors, enabling them to earn a wage whilst developing skills.

The Government said the new levy will allow funding for shorter apprenticeships, giving learners and employers greater flexibility over their training than under the existing system – where apprenticeships must run for at least 12 months.

To fund this, employers are being asked to rebalance their funding which will involve businesses funding more of their level 7 apprenticeships – equivalent to a master’s degree and often accessed by older or already well qualified employees – outside of the levy.

David Hughes, chief executive, Association of Colleges, said: “The significant drop over the last six years in young people starting an apprenticeship and the shift away from apprenticeships in vital sectors and regions shows that reform of the apprenticeship levy is long overdue.”

Sue Ferns, senior deputy general secretary of the Prospect union, said: “A more flexible approach to using the levy is essential but must extend beyond a demand-led model.

“Skills England and equivalent bodies must generate a much higher throughput of skilled workers ready to deploy as opportunities arise.”

Ann Francke, chief executive of the Chartered Management Institute, said: “We are concerned that this decision may negatively impact three of the five Government missions: to grow the economy, reform the public sector and provide opportunity for all.

“The unintended consequences of restricting the use of higher level of apprenticeship funds will affect those people looking to improve their management and leadership skills which help to drive up productivity. That is exactly what the Government’s growth mission is meant to be focussed on.

University and College Union general secretary Jo Grady said: “We welcome Keir Starmer’s desire to get young people into good jobs, but you cannot skill up the next generation so long as college workers are severely underpaid.”

Stephen Phipson, chief executive of Make UK, said: “This announcement demonstrates real intent from the Government to fix England’s broken apprenticeship system.

“For too long, manufacturers have been held back from investing in critical trade and technical skills by a chronic lack of funding and industry will applaud the Government’s determination to start putting this right.

“It is clear the Prime Minister has listened to businesses across the country and taken decisive action on apprenticeships.”

The Apprenticeship Levy was launched by the Conservative government in 2017, for employers with an annual wage bill of more than £3 million but firms have been calling for it to be reformed for years.