The UK is finally waking up to the scale of its NEET problem. Almost one million 16 to 24-year-olds are not in education, employment or training. If nothing is done, within five years that number could hit 1.25 million, equivalent to one in six young people.
Into this challenge comes the new Growth & Skills Levy. It’s a replacement for the Apprenticeship Levy, which was roundly despised by everyone, it seems. Trade bodies called it “broken”, M&S CEO Stuart Machin dubbed it “maddening” and many fmcg companies, unable to spend their funds themselves, ended up routing them to other organisations.
The new levy aims to fix some of the problems: it offers shorter, more flexible apprenticeships; halves the expiry window to force faster spending; and introduces foundation apprenticeships aimed at entry-level roles, including in retail and hospitality. Richard Pennycook, formerly of Skills England and the Co-op, says it has been “cautiously welcomed”.
But cautious is the operative word. There are concerns the reform is “in effect a rebranding”, according to Joe Dromey, general secretary of the Fabian Society. That would be a big issue given apprenticeship starts are down by a third since the original levy launched. The Sutton Trust’s Billy Huband-Thompson also raises the question of whether more flexibility means employers spend levy funds on training existing staff rather than hiring apprentices. If that is the case, it will do very little to widen opportunities for young people.
And that is the true test of the Growth & Skills Levy. It’s not about whether fmcg companies find it easier to spend their pot, but whether the reforms open doors for young people. As Asda’s chief people officer James Goodman highlights, the restrictions around funding for leadership pathways might actually make it harder for people to move from the shop floor into management.
The levy has taken the right approach, but the real proof of its success will be in whether reforms lead to lower costs for employers who hire young people. The greatest sign of that will be an increase in opportunities not just for existing staff but for NEETs – so we never get near that 1.25 million figure.
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