The chancellor needs to end the abuse of apprenticeship levy funds if he’s serious about boosting growth

Editorial: Though hardly at the top of the chancellor’s list of priorities, the sums involved in these scams are material – at least £1bn

(Dave Brown)

A figure of obviously equable temperament, the chancellor of the Exchequer, Jeremy Hunt, is well suited to his job – which is to exude calmness and competence. The Budget is an ideal opportunity for him to build on the work he has done since he was appointed by Liz Truss, in chaotic circumstances, to retry a sense of order to Britain’s public finances. Put at its simplest, boring is good.

That does not mean that Mr Hunt won’t have anything to say, nor that he isn’t keen on getting a good press. Quite the contrary, given the government’s still dire poll ratings. The challenge that Rishi Sunak and Mr Hunt have set themselves is to raise the UK’s growth rate, and that means more investment in new technologies, equipment – and people.

In that context, Mr Hunt and his colleagues need to end the abuse of apprenticeship levy funds, as revealed by The Independent’s investigation. Though hardly at the top of the chancellor’s list of priorities, the sums involved in these scams are material – at least £1bn. This is taxpayers’ money has been used over the past five years to fund 55,000 already high-earning executives to take courses that are equivalent to a master’s degree but are badged, absurdly, as “apprenticeships”.

Indeed, some £100m has gone on funding MBAs, many for executives earning more than £100,000 a year – despite a government attempt to stamp this out two years ago. The rise of “apprenticeships” for management candidates appears to have come at the cost of the young, with 100,000 fewer under-25s starting apprenticeships than before the levy was introduced six years ago.

It is outrageous that scarce resources should have been diverted in this fashion: would that those involved had steered their ingenuity to growing their businesses and taking on real apprentices, rather than exploring loopholes in a scheme that was never meant to subsidise them. The skills and apprenticeships minister, Robert Halfon, has vowed to crack down on the MBA scandal, and it can’t come soon enough.

As a nation that has long made its living from the human capital of its people, the UK needs to raise its investment game. It hardly needs to be added that Brexit has made life unnecessarily harsher for business, and therefore the national effort to increase investment and productivity needs to be redoubled. The recent cuts in HS2 and road infrastructure investment highlight what a difficult task this is going to be, when calls on the Exchequer for higher spending on public services are, rightly, also becoming more intense. Yet Mr Hunt will have some room for manoeuvre, and to make at least some tactical plays.

For example, he can still make the tax breaks for investment more generous, even as he is hiking the headline rates of corporation tax. Though the concept has its limits, it may be that the 12 new investment zones in eight “left behind” areas will indeed “drive business investment and level up”, as has been promised. Much the same can be hoped for from the “tech hubs” clustered around universities in England that will benefit from almost £1bn in extra funding as part of a range of measures in the Budget on Wednesday to boost business investment in the regions.

On the whole, though, the investors and voters alike will be looking to the “big picture”, and the outlook for inflation. If the Treasury and Bank of England continue to bear down on price rises and squeeze the nascent inflationary wage-price spiral out of the system, then the outlook for the government, politically – and the national economy – will be greatly improved, if not transformed. The UK is still lumbered with “long Brexit”, and a trend rate of growth that looks set to be stubbornly sluggish for some years, but at least, with investment in public infrastructure, private businesses, cheap green energy and in people’s skills, there can be some small cause for longer-term optimism.