CBI brands apprenticeship levy a "failed experiment" and calls for urgent government review

Business leaders have called time on the apprenticeship levy, demanding the government ends the “failed experiment”.

The Confederation of British Industry (CBI) said there was an urgent skills challenge in the UK jobs market and the country faced a stark choice: more investment in lifetime learning or do nothing and risk spiralling rates of unemployment.

In its report, Learning for Life, the CBI said that by 2030, nine in 10 employees will need to reskill and that new technologies and the changing nature of the economy meant the skills needed for many jobs were transforming, with some roles being lost entirely.

Its recommendations include “evolving” the apprenticeship levy so that businesses can invest in high-quality accredited training instead.

Last month, the prime minister announced a ‘lifetime skills guarantee’, enabling adults without A-levels or equivalent to take a full-funded further education course.

The CBI welcomed this move, but director general Dame Carolyn Fairbairn added: “It is only a start.

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“The government has long promised meaningful reform of the apprenticeship levy but has not delivered it.

“Meanwhile the number of apprenticeships continues to fall.

“It is time to end this failed experiment.”

Fairbairn said: “Replacing the Apprenticeship Levy with a Flexible Skills and Training Levy and a training tax credit for SMEs would encourage every firm to invest more in the skills that are essential to the long-term success of their company and workforce.”

Earlier this year it was revealed that hundreds of millions of pounds raised by employers in levy payments had not been used and was instead paid back to the government.

The FTA said the system was flawed and needed to be reformed.