Apprenticeship Levy and skills must be top priority for next government says REC and CBI

The Recruitment & Employment Confederation (REC) is supporting a call by the CBI for the next government to reform the Apprenticeship Levy within 100 days of election.

The CBI Manifesto is also calling for action on other key labour market policies within the same timeframe: a cross-departmental strategy to tackle labour shortages and to announce a new remit for the Low Pay Commission.

“The next government must act quickly to smooth out kinks in the labour pipeline or risk a £39bn cost to the economy per year because of labour and skills shortages – just short of two whole Elizabeth Lines. Success will require politicians and policymakers to up their understanding of today’s tight labour market and build the solutions to it in a more modern way,” the REC has said in a statement.

REC deputy CEO Kate Shoesmith said: “We strongly support the next government aiming to reform the Apprenticeship Levy within the first 100 days. This should include reform that allows levy funding for high-quality, modular training to enable more people, including temporary workers to train and fill vacancies. Today, levy funds are only available to those who have the same employer for at least one year, which is the time it takes to complete an apprenticeship. But this means we are not making the most of British talent, because by our calculations, out of the one million temporary workers on assignment in the UK every day, around 960,000 workers are ineligible for levy funding.

“Asking the Cabinet office to lead cross-departmental strategy to tackle labour shortages – and immediately – gives us a chance of a long-term plan for how the UK will put people planning at the heart of its growth strategy. But the next government must commit to keep this approach in place over many years. After all, the most successful UK labour market changes of past few decades, such as National Living Wage and pensions autoenrollment, have been delivered this way.”

Shoesmith went on to say: “A look at the Low Pay Commission’s remit is worthwhile to ensure decisions around minimum wages are entirely evidence-based, rather than politically driven. Wage rates must support enhanced opportunities, protections for the most vulnerable workers, as well as sustainability for all businesses.”

The UK general election will be held on 4 July.

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