Building an apprenticeship system that serves the UK’s diverse labour market

There is no question that apprenticeships are a great thing. They help vast numbers of people every year, offering hands-on skills training opportunities while also providing employment. The REC has been a long-term supporter of apprenticeships, but we have also been calling for a reform to the system, so the scheme can extend the access of opportunities and funding for our industry. The system has so much potential to unlock opportunities and to drive our economy to a higher skilled, higher productivity economy. But this will only be achieved when the scheme recognises the diverse nature of the labour market and the flexible workforce.  

For those looking to progress, there is a wide variety of training programmes available - some where workers pay, some funded by employers, and some by government. Some businesses fund apprenticeships for their employees via the Apprenticeship Levy, and while this might work for a few big businesses, operating in the permanent sector, the very nature of temporary work means the vast majority of our members cannot access the system, even though many still have to pay the levy. At present, the levy lacks the flexibility to meet the needs of the flexible workforce. And this is something the REC has been calling on the government to address for a long time.  

Many of our members have the willingness and resources to support, upskill and retrain their workers. However, under the current scheme, an apprenticeship must last for at least 12 months. The recruitment industry places one million temporary or freelance workers into work on any given day, but only 2% of temporary assignments last for 12 months or more. That means that almost a million people from the industry are automatically cut off from valuable training opportunities, despite there being funds to train them via the levy.   

The current focus on year-long apprenticeships also disadvantages many businesses trying to fill vacancies quickly or at entry level. Take HGV drivers as an example. There is a shortage of almost 100,000 drivers in the UK. Money from the levy could be used to fund some of their training requirements, which only take a few weeks. The opportunity to upskill whilst maintaining some flexibility could make a significant difference to many temporary workers.  

Opening up apprenticeship levy funding so businesses can use it for shorter training courses and non-apprenticeship schemes would be a win-win for the industry, workers and government. Firms could unlock the funding to train and upskill their workers with the government's support, building those workers’ skills and the UK's productivity levels. There are thousands of short-term training courses that would allow workers to develop, earn and grow. Broadening the apprenticeship levy could remove one of the biggest barriers preventing our workers progressing their careers, benefitting everyone and boosting the economy. It is also an opportunity to help with the government's aim of levelling up. There’s no time to waste in reforming the way the Apprenticeship Levy works.