Skills England Update – Levy Reforms

Since Labour’s victory in the July election, we have been eagerly awaiting updates on their manifesto commitments regarding skills development. The King’s Speech, which outlined the government’s priorities during the first parliamentary session, reassured us that skills will be a central focus, whether through the establishment of Skills England or the reform of the apprenticeship levy.

As members of the Association of Education and Learning Providers (AELP), BPIF Training has been closely monitoring the latest developments on both Skills England and the levy reforms. Although details are still emerging, we expect Skills England to be fully operational by the spring of 2025. In the meantime, it’s encouraging to see the government actively seeking feedback from employers and providers on the implementation of Skills England. There is a clear desire to enhance employer engagement and streamline the skills system, making it less complex and bureaucratic. The interim chair of Skills England, Richard Pennycook CBE, has highlighted three key priorities:

• Developing a coherent, authoritative overview of national and local skills needs for the next decade.
• Creating a highly responsive training system, including a list of eligible training programs that can be funded through the Growth and Skills Levy.
• Ensuring that national and regional skills systems work together effectively to meet these needs.

The details of the apprenticeship levy reforms are still uncertain. It’s vital for the government to provide a clear plan and timeline for introducing the Growth and Skills Levy, which will replace the apprenticeship levy. This clarity is needed as some employers across various sectors, including our own, are postponing their investments in skills, anticipating more flexible levy reforms in the near future. Without prompt and clear communication from the government, there is a risk that skills development could stall nationwide. We have been assured that any new flexibilities will not undermine the focus on expanding apprenticeship opportunities, and we advise employers who are considering apprenticeships as part of their workforce development plans to continue with this. 

BPIF has been actively participating in roundtable discussions with the Department for Education (DfE), who have been gathering feedback from providers and employers on desired flexibilities within the levy. Emerging themes indicate that employers want to preserve existing provisions while also improving and enhancing apprenticeship programs without having to compromise. Key areas for improvement include:

• Maintaining an all-age, all-level apprenticeship program.
• Prioritising young people while also emphasising the importance of upskilling and retraining adults for workforce development.
• Simplifying the end-point assessment process.
• Adopting a more consistent approach to functional skills policy.
• Allowing more flexibility in program duration, especially for level 2 apprenticeships.
• Increasing agility in updating apprenticeship standards and content.

We anticipate further consultations with providers and employers, likely in the autumn, and we will continue to represent your views. Our current message is that immediate changes are unlikely, with developments expected to unfold over the next 6 to 9 months. We strongly believe that apprenticeships will remain a vital part of workforce development, and we advise those considering postponing investments due to anticipated apprenticeship reforms not to postpone these plans. 

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