Government unveils plans for Skills England and new growth and skills levy
The Government has announced the formation of Skills England, a new body designed to overhaul the current training system and replace the apprenticeship levy.
This initiative aims to address the fragmented nature of skills training and create a more cohesive approach to meeting the UK’s future skills needs.
What changes can we expect?
Skills England will manage the new growth and skills levy, which is set to replace the existing apprenticeship levy.
Richard Pennycock, a non-executive director at the Department for Education, will lead the organisation in its interim phase.
Although specific details about the new levy are yet to be disclosed, the primary goal is to simplify the process of funding apprenticeships and other training opportunities.
The new levy is expected to remove existing barriers and encourage more businesses to invest in skills development in response to demand.
With skills shortages doubling between 2017 and 2022, now accounting for 36 per cent of job vacancies, Skills England will aim to bridge these gaps.
The new body will coordinate efforts among central and local government, businesses, training providers, and unions to address skills needs across all regions of the UK.
Skills England is expected to provide strategic oversight of the post-16 skills system, aligning with the government’s industrial strategy.
It will also identify critical skills shortages and direct investment, accordingly, aiming to boost opportunities and reduce reliance on foreign workers.
The growth and skills levy will offer greater flexibility in how funds can be spent, allowing businesses to invest in training beyond traditional apprenticeships.
This is expected to benefit a wider range of workers, including those in temporary or flexible employment.
What does this mean for businesses?
The creation of Skills England and the new growth and skills levy could be considered good news for businesses for several reasons:
-
Enhanced flexibility – The new system will allow businesses to spend levy funds on a broader range of training options, not limited to apprenticeships. This flexibility can help businesses address specific skills gaps and adapt training to their unique needs.
-
Simplified access to training – The planned reforms aim to remove barriers that have previously made it difficult for businesses to access training funds. This should make it easier and more straightforward for businesses to invest in their employees’ development.
-
Strategic collaboration – Skills England’s role in bringing together various stakeholders — including government, businesses, and training providers — will foster more effective collaboration. This approach is intended to ensure that training initiatives are responsive to both current and future skills needs.
-
Addressing skill shortages – With skills shortages being a significant concern, the focus on identifying and addressing these gaps could help businesses find and retain talent more effectively. This is particularly important given the high percentage of job vacancies attributed to skills shortages.
Skills England is set to be established over the next nine to twelve months, with the Skills England Bill expected to be introduced this autumn.
The new organisation will assume functions from the Institute for Apprenticeships and Technical Education (IfATE), which will continue its work during the transition.
