The University Vocational Awards Council (UVAC) has warned that reform or abolishment of the Government’s Apprenticeship Levy scheme will have a detrimental impact on the skills gap in the financial services sector.
According to the council, cuts to funding of higher and degree apprenticeships may lead to a decline in skilled professionals.
UVAC represents more than 90 universities that deliver higher and degree apprenticeships and has produced a white paper setting out the future of the Apprenticeship Levy and what a future Government should consider to maintain the volume and quality of delivery of higher-level skills.
Dr Mandy Crawford-Lee, chief executive for UVAC, said: “One major casualty of radical reform or abolishment of the current apprenticeship levy scheme will unfortunately be skilled professionals across the financial services sector if funding to higher and degree level apprenticeships is compromised.
“The potential election of a new government this summer, misconceptions around the amount of levy funds retained by the Treasury annually and increasing pressure from big business to scrap it completely has meant its future is uncertain.
“This uncertainty poses a threat to the delivery of level six and seven apprenticeships which are so integral to recruiting and training skilled, senior level people working across both the private and public sector.
“Putting apprenticeship levy funding at risk to those aiming to work in finance or upskill within the industry, would also hinder social mobility.”
The levy was first introduced in 2017, funded by a 0.5% compulsory contribution by employers with payroll costs of over £3m.
It was met with some concerns, especially from levy-paying organisations, regarded as another form of business taxation and has recently come under heavy scrutiny.
UVAC recommended the ring fencing of public sector levy payments.
This would ensure that employers, such as the NHS, would have far greater control over where it spends its payments, regardless of whether restrictions were introduced for employers in the private sector.
Other proposed reforms to the levy opposed by UVAC could include a graduate ban which would prevent funding being spent on young people and adults pursuing a finance-based higher or degree apprenticeship.
Crawford-Lee added: “Whether it’s reform of the current levy system or transitioning to Labour’s proposed Growth and Skills alternative, key consideration needs to be given to how apprenticeship funding is spent across the financial services sector to ensure it can attract, train and retain the best talent.”
