Ministers to face House of Lords committee grilling over apprenticeship levy criticism and the future of student loans

Ministers are to face questions from the Lords Economics Committee this week on criticism over the apprenticeship levy, as well as the future of student loans.

The House of Lords Economics Affairs Committee will be grilling Anne Milton MP, minister of state for apprenticeships and skills, along with Sam Gyimah MP, minister of state for universities, science, research, and innovation, on Tuesday 13 March.

The Committee said among the questions it will put to the ministers include how fair is the current system loans system, and how biased towards university applications is the careers advice and information provided to pupils?

The apprenticeship levy will also be in the spotlight since its introduction has been followed by a decline in apprenticeships.

It was introduced last April and makes employers with an annual pay bill of over £3m contribute 0.5 percent of their payroll towards a levy, for the money then to be claimed back to fund training for new or current employees.

Members of the House of Lords have already criticised the levy, saying its first year in place had been “woefully inadequate” at a previous meeting of the Select Committee.

Employers have been critical of the levy, with the chair of the EEF manufacturer’s body saying last month its impact had been “disastrous”.

Dame Judith Hackitt said it was seen as just another tax on business, and that many firms have postponed apprenticeships due to the levy.

Figures in January revealed there was 114,000 apprenticeship starts for the first quarter of the 2017-18 academic year, compared with 155,600 for the same period the year before – a drop of more than a quarter.

Research from the London Chamber of Commerce and Industry (LCCI) meanwhile, found that more than a third of businesses are not aware of the government’s apprenticeship funding scheme.

The government had set the target of creating 3m apprentices by 2020, and the Department for Education has said previously that the levy will “boost economic productivity, increase the country’s skill base and give millions a step on the ladder of opportunity”.

The DfE has also said it may “take time” for organizations to adjust to the new funding system, so conclusions should not be drawn too swiftly from the initial figures on apprenticeship starts.

First seen here.

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