Spring statement: Chancellor will review apprenticeship levy

But announcement contains no extra help for schools with rising energy bills

But announcement contains no extra help for schools with rising energy bills

23 Mar 2022, 13:50

Rishi Sunak has announced that he will review the apprenticeship levy.

In his spring statement today, the chancellor said a review of the levy will be part of new Treasury tax plan, which will be finalised in the autumn.

Sunak outlined various policies to help families with cost of living increases, including raising the earnings threshold above which national insurance contributions are paid, and plans to cut basic income tax by a percentage point by 2024.

However, the spring statement did not include any additional financial help for schools, which also face soaring energy bills. In fact, schools are barely mentioned in the 54-page document.

The apprenticeship levy is paid by academies and trusts with a payroll bill of £3 million or more, and by councils on behalf of local authority-maintained schools. Schools can then draw down funds from the levy to pay for apprentice training.

Schools have struggled to use funds

But the schools sector has struggled to make use of the scheme, with some leaders criticising a lack of courses they can spend the money on.

A postgraduate teaching apprenticeship route, created in response to demand from schools, accounted for less than 800 entrants to the profession in 2021.

Schools have also been criticised for paying apprentice teaching assistants for as little as £4.30 an hour, prompting concerns that some could be “exploiting” the apprenticeships system for cheap labour.

Sunak warned today that the UK lags behind international peers in adult technical skills.

“Just 18 per cent of 25 to 64-year-olds hold vocational qualifications, a third lower than the OECD average. And UK employers spend just half the European average on training their employees.

“So we will consider whether the current tax system, including the operation of the apprenticeship levy, is doing enough to incentivise businesses to invest in the right kinds of training” he said.

Chancellor ‘failed to address financial pressures’

Leaders have criticised the lack of extra cash for schools.

Geoff Barton, from the ASCL school leaders’ union, said he was “disappointed that the chancellor failed to address the financial pressures facing the education system amidst soaring inflation”.

“Schools are reporting huge increases in their energy bills and the government expects them to fund pay awards out of these stretched budgets too.

“We are gravely concerned that they are facing a fresh funding crisis. This is compounded by the inadequacy of the proposed pay award for many staff which comes after a pay freeze and is likely to worsen retention rates.”

And Dr Mary Bousted, joint leader of the National Education Union, warned that the chancellor’s “refusal to increase education funding in the face of this inflation surge signals a return to the austerity of the 2010s”.

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