Carolyn Fairbairn

The government needs to team up with businesses for a "radical rethink" on the design of the apprenticeship levy, if it is to delivery the quality skills training needed to support a more prosperous society, the director-general of the CBI has warned.

Highlighting the commitment of businesses to raising skills levels, Carolyn Fairbairn said there are growing concerns among firms about the viability of the apprenticeships levy. She said the government has the opportunity to create a "once-in-a-lifetime revolution" in skills, but is only likely to deliver another "once-in-an-administration shake-up".

Speaking to business leaders in the City, Ms Fairbairn said: “Firms are passionate about apprenticeships, and it’s this passion which drives deep frustration over the levy plans as they currently stand."

She added: "[The government must] take the time to draw on business' vast experience to make sure that the levy works for everyone, rather than rushing out a poorly thought through plan. This isn't what businesses want, and we don't believe it is what government wants either."

The CBI is calling for:

  • A stronger role for the new Institute of Apprenticeships
  • More flexibility in how firms can spend the levy, including on existing training and high-quality support for apprentices
  • The digital system which managers levy spend to be ready and able to support the delivery of training, in full and from the start.
In her speech, Ms Fairbairn said: “Firms across the UK are emphatic that tackling skills shortages is the only way to succeed and create prosperity. They want to create quality apprenticeships and they’re ready to work with the government to do this.

“But as it stands that’s not what the levy is doing. We need to change that, which is why we are calling for a ‘radical rethink’.”

She added: “As a nation, what outcome are we trying to achieve on skills? The Government has set out a target to create three million apprenticeships by 2020 and it deserves credit for its level of ambition.

“Business shares this goal to raise numbers - yet - despite the Government’s good intentions - the target could have unintended consequences.

“What’s being counted is three million started apprenticeships, not three million qualified apprentices. There’s a big difference. Indeed, measuring success by the number of starts tells us little about whether the system is really delivering and could even drive the wrong outcomes. We don’t want this and I’m confident that the government doesn’t either.”