The government should axe its levy on apprenticeships, the head of skills at the Confederation of British Industry (CBI) has said, as the UK wrestles with STEM skills shortages and shrinking talent pools.
Speaking to the science and technology Lords committee in parliament yesterday, the CBI’s Robert West urged that an independent government taskforce to tackle the country’s skills crisis amid sprawling labour shortages was “worth exploring”.
“There are two things going on here that both need addressing. One is a labour shortage and the other is there’s a skills shortage,” he said. “Pre-pandemic, the CBI were already drawing attention to the fact that we’ve got the lowest adult participation rates in something like 20-years. And investment in adult education continues to fall.”
The Apprenticeships Levy, introduced in April 2017, hits businesses with an extra tax for funding longer-term training. Only larger businesses face with an annual employee pay bill of over £3m face a charge of 0.5 per cent of their pay bill.
The Levy, which caps funding for a single apprentice at £27,000, has previously been accused of not being fit for purpose when it comes to apprenticeships in STEM. With engineering and manufacturing being fairly technical fields, the cost of training often exceeds the maximum funding available from the scheme.
Upskilling and reskilling remain the “biggest games in town” with regard to the UK’s skills needs currently, West continued. The government singled out upskilling as one of its 12 missions in its levelling up whitepaper.
Members of the CBI, which represents 190,000 businesses – around a third of the UK’s private sector workforce, have noticed that investment in skills in the country is lagging on the international playing field.
“It’s been pointed out to us quite rightly that business investment in the UK in skills in general – not just in STEM – is lower than that of our competitors. Similarly, so is the government’s investment in adult education,” he said.
“What we do have in terms of short-term solutions is pressured on us particularly at the moment: ‘people need people now with the jobs’ skills’. We understand that. Of course, that’s right. But you won’t solve the problem unless you’re investing long term as well.”
Beyond investment, a culture shift is critical when it comes to attitudes towards education in adulthood – which starts in the youngest generations.
“We still need to encourage a culture of lifelong learning. At the moment, what we have is an education system that broadly suggests that you’re educated up to an age of 18 or 21 and then you get a job. And we all know in a world of changing technology that that isn’t the case any longer,” West explained.
“STEM still being seen as something that’s done by boys, and getting their hands dirty… We’re not selling STEM enough in the way that its actually being delivered by businesses today.”