Apprenticeship Levy ‘will worsen North-South divide’


London and the South East will benefit most from the Apprenticeship Levy which is due to be introduced on Friday, according to research by the Institute for Public Policy Research (IPPR).

The think tank also said areas described by the Prime Minister as having been ‘left behind’ by globalisation will receive proportionately less investment for vital training opportunities.

The Apprenticeship Levy is intended to boost investment in training across the country, but the IPPR said the Government has admitted it has not carried out its own assessment of the regional impact of the levy.

The IPPR said analysis shows the levy will stimulate training most in London and the South East. These regions have 38% of the UK’s large businesses, which will be targeted by the levy, but higher levels of employment and only 27% of the population. It added that London and the South East already have among the highest qualified populations in the country, with 50% and 40% respectively of their populations educated to level four and beyond, compared with 30% in areas such as the North East and Yorkshire and Humber.

The IPPR said the findings dispute Government claims that the levy will help to break down the barriers to social mobility faced by young people today. The Government plans for the Apprenticeship Levy to support three million apprenticeships by 2020, but the IPPR warned that unless it changes the policy to ensure that investment is distributed more fairly between north and south, it will exacerbate existing regional disparities in opportunity for young people.

The IPPR pointed out:

  • The proportion of young people in each region who are not in education, employment or training is far higher in the North East (18.6%) Yorkshire and Humber (17.5%) compared to London (13.4%) and the South East (10.7%)
  • The UK's youth unemployment hotspots are all outside of London and the South East - with Bradford, Middlesbrough, Swansea and Wolverhampton all having youth unemployment rates in excess of 25%
  • The North East has the highest youth unemployment rate amongst UK regions (18.3%) compared to the lowest rate of 11.2% in the East of England

According to the think tank, the levy will raise less money, and stimulate training less, in the areas that need it most. It called for an alternative to the Apprenticeship Levy, which it called the ‘Skills Levy’; which should be aimed at increasing employer investment in the areas that need it most and ‘turbo-charge’ skills devolution. The IPPR claimed the Skills Levy would raise over £5 billion – twice the amount raised by the apprenticeship levy. It pointed out the Skills Levy would be broader, applying to all employers with 50 or more staff; larger, set at one per cent of payroll for the largest employers; and fairer, with a £1.1bn 'Regional Skills Fund' to boost investment in left behind areas, as a result of top slicing investment from the largest employers.

Clare McNeil, IPPR associate director for work and families, said: “The government has said that it wants to break down the barriers to social mobility faced by young people in this country. It is clear to see that young people outside of London and the South East, face a much harder time finding a first job or training opportunity - particularly those not going on to university.

“It is extraordinary then that the government has not analysed the regional impact of its new apprenticeships policy, which is likely to boost investment in training precisely in those areas where employment is higher, such as in London and the South East, leaving unemployment hotspots in the North East or Yorkshire with proportionately less funding.

“These areas are also those most likely to be hardest hit by the uncertainty facing the UK over Brexit, and the increasing impact of technological change on jobs. The Education Secretary must think again on this policy if the government is not to put even greater numbers of young people at a disadvantage simply because of where they live.”

Monday, 27 March 2017

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