Apprenticeships scheme 'a massive lost opportunity'

An apprentice at Airbus in Flintshire - the company pays a levy to the UK Treasury

An apprenticeship scheme funded by a levy on big employers is a "massive lost opportunity" and must be reformed, the head of the CBI has said.

Wales and England operate different systems but Carolyn Fairbairn believes neither is working well.

All UK public and private organisations with an annual wage bill of more than £3m must pay the 0.5% apprenticeship levy, introduced in April 2017.

The Welsh Government said it was delivering a "successful" programme.

Ms Fairbairn is director general of the Confederation of British Industry (CBI) business lobby group - which speaks for about 190,000 UK businesses.

Employers in England who pay the levy receive vouchers to spend on staff training.

Smaller employers are also eligible for help with training.

But there have been complaints in England that the system is costly and complicated.

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In Wales, skills policy is the responsibility of the Welsh Government.

It gets money back from the UK government as a consequence of the apprenticeship levy, but it has not ring-fenced the funding for training. There is no voucher system, but employers can access training such as apprenticeships as they did before the levy was introduced.

Carolyn Fairbairn visited a factory in Caerphilly owned by Aerfin, which pays the apprenticeship levy

Ms Fairbairn said: "The ideal would be a single brilliant system for using the apprenticeship levy across the UK. We are a single economy."

She said the system must be reformed within six months and also argued for businesses to be in the driving seat when it comes to deciding how the money should be spent on skills and training.

"This is the time when we have to get it right - and for businesses not to be able to spend, not to find they can draw down and invest in the skills of the future, is a massive lost opportunity," she said.

Wales initially received £128 million from the UK government for the first year of the levy.

However the Welsh Government has argued this was not all new money, because it was offset by the removal of £90m which was previously due to Wales under the old system.

The Welsh Government has said it increased investment in apprenticeships from £96m to £111.5m from April 2017.

A spokesman said: "We have been consistent in our view that the UK Government's apprenticeship levy is not the most effective way of supporting training.

"However, we have ensured we are delivering a successful apprenticeship programme in Wales which meets the skills needs of employers of all sizes.

"We are on track to achieve our target of 100,000 high quality apprenticeships during this term of government."