Apprenticeship Levy

MQT on 2019-03-21
Session date: 
March 21, 2019
Question By: 
Fiona Twycross
Labour Group
Asked Of: 
The Mayor


Is the Government’s Apprenticeship Levy working for London’s businesses and residents?


Apprenticeship Levy

Apprenticeship Levy

Answered By: 
The Mayor

Sadiq Khan (Mayor of London):  The Apprenticeship Levy is not currently working for London’s businesses and residents.  Apprenticeship starts in London have fallen by 14% since the introduction of the levy in April 2017, compounding London’s historic low rates of apprenticeship starts.  Many London businesses are telling us that they have not fully utilised their Apprenticeship Levy contribution.  For instance, a survey of London employers by London Councils and the London Chamber of Commerce and Industry found that 42% of the capital’s levy‑paying businesses did not expect to use any of their levy funds in the next year. 


Deputy Mayor Jules Pipe, together with London Councils, London First and the London Chambers of Commerce and Industry, has sent joint letters to the Chancellor of the Exchequer [Philip Hammond MP] and the Minister of State for Apprenticeships and Skills [Anne Milton MP], lobbying them in relation to what changes need to be made.  I have also worked with the metro mayors to lobby the Government for us to be given some of the resources that are currently unspent but also, for us to be given the powers that Wales and Scotland currently have that we do not. 


Fiona Twycross AM:  Thank you.  What changes would you like to see the Government make to ensure that their apprenticeship policy works better for London? 


Sadiq Khan (Mayor of London):  A number of things.  We want to be allowed to pool apprenticeship funding to invest in the city’s talent pipeline.  We want the levy funds to be able to be used for pre‑employment training to support people to get into the workplace, to get them match fit for that position.  Sub‑skills, people call them.  We also want some of the money, a small amount, to be used for some of the administration that small employers cannot do that is required for having apprenticeships as well. 


We also ‑ and this is something you have been pushing for for some time ‑ want to have more part‑time and flexible apprenticeships.  It is really difficult for some private sector employers to provide those.  If we were in charge of this, we could do far more in relation to this area as well. 


Fiona Twycross AM:  Excellent, thank you.  You have been pushing for the Government to allow you to receive unspent Apprenticeship Levy funds in London.  If you were to receive this funding, how would you spend this money and is progress being made in this area? 


Sadiq Khan (Mayor of London):  Not the progress being made that we think needs to be made.  It is not simply London; other parts of the country have unspent Apprenticeship Levy as well.  It is something like £1.3 billion.  It is a lot of money.  What we are hoping it can be used for is in making sure we can help small businesses in particular.  There are small businesses that would love to have an apprenticeship but cannot because they are not ready.  The bigger businesses will help them and if we had some of this unspent money we could get that coordination working well. 


There are many other ideas we have.  These ideas do not come from us in City Hall, they come from speaking to employers, businesses and young Londoners about what sort of scheme would help them the most.  I genuinely believe we can do a better job than the civil service in Whitehall.  I have nothing against the civil service in Whitehall but we know our city far better than they do. 


Fiona Twycross AM:  Yes, I would agree on that.  We have seen the numbers, both for proportion and percentage, for construction apprenticeships increase in 2017/18 and we finally have some women undertaking construction engineering apprenticeships compared to zero in 2015/16.  That is welcome.  What will you do to continue to work towards the end of gender stereotyping in apprenticeships and what will you do from here in City Hall? 


Sadiq Khan (Mayor of London):  It is really important.  TfL does a huge amount of work in relation to getting young women, Londoners, to get their apprenticeships in engineering and in the sort of industries not traditionally seen as women‑friendly industries.  It is a huge amount of work TfL are doing.  In City Hall, if you look at the numbers of our apprenticeship intake we have lots of women, diverse Londoners, including ethnically diverse but also working class Londoners from poorer communities as well.  It is really important we use apprentices as a way in. 


Higher education is OK for some people but not for everyone.  We have to get rid of the snobbery around apprenticeships as well and emulate some of the German experience, where apprenticeships have the same esteem as academic education.  We are doing our bit from City Hall and the GLA functional bodies as well. 


Fiona Twycross AM:  Thank you.  I think that would be very welcome.  There is a bit of a theme of the day around no‑deal Brexit.  What impact do you think a no‑deal Brexit could have on the number of apprenticeships being started in London, and how is the funding you announced in November [2018] to create new apprenticeships in hospitality and construction helping to mitigate that? 


Sadiq Khan (Mayor of London):  We have, in the most recent funding we have given, announced £1.3 million towards three apprenticeship pilots.  We have deliberately chosen those three areas, construction, hospitality and retail, for a variety of reasons, not least for the reasons that, as Assembly Member Duvall alluded to, with fewer EU citizens coming here ‑ we know that has happened ‑ and possibly even fewer coming in the future, there is now an urgency to make sure we accelerate Londoners to get the skills through apprenticeships for these areas.  That is why we are doing this piece of work in those industries. 


The sort of work we are doing is to help employers get some funding that they are needing to help them create apprenticeships, and to see if we can transfer some of the levy funds to employers in these sectors and supply chains locally to help apprenticeships in these areas.  It is really, really important. 


Fiona Twycross AM:  That is great, thank you.