The apprenticeship levy has utterly failed the British economy

The UK has a problem across almost every sector and every industry that, until it is fixed, is damaging our economic future and productivity.

It is no secret that we have a skills shortage: daily we hear about the drastic shortfall of nurses and doctors. And while overall unemployment is low, it is disproportionately impacting the young, with 399,000 people out of work.

The construction and infrastructure industry contributes 7pc of our national GDP and is gearing up to deliver an even more ambitious range of projects to make the UK’s green energy transition a reality.

This is something the Government recognised with its bold decision in the Autumn Statement to safeguard £600bn for capital investment over the next five years, with priority placed on investment in infrastructure, energy efficiency and innovation. This is expected to give our economy a much-needed shot in the arm. Yet research from National Grid states that 400,000 “green” jobs must be filled to enable us to deliver our successive net-zero targets. And the latest figures show that only about 23,000 new apprentices are starting careers in the sector each year.

Where do we find the number of skilled workers required, in the time frame needed?

First, we need a plan that produces rapid results so that current critical projects can be built. But at the same time, we need a larger solution that fixes the stubborn causes of our long-term national skills gap, once and for all.

As the founder of The 5pc Club – a movement of over 770 employers committed to making vocational training (“earn and learn”) positions accessible to all – I have fought for 10 years to boost the role of apprenticeships and other formal training programmes in building a socially mobile, prosperous and cohesive Britain.

I strongly believe that on-the-job learning can break down barriers many people face in acquiring the skills that create lifelong employability. It enables us to find and develop the talent we need to compete globally and – as many individuals have proven – it grows leaders in every walk of UK life.

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Balfour Beatty supported the aim of the Government’s apprenticeship levy – boosting structured apprenticeship programmes – even before it came into force in 2017.

However, despite the Government’s intent to establish a technical education system to match our world-leading university sector, the apprenticeship levy in its current form has not delivered. Since the levy’s introduction, take-up has in fact declined: the 713,000 apprentices last year represent the lowest annual total since 2010. It is clear change needs to happen, and it needs to happen now.

While the industry must lead on delivery, the Government has an essential role in supporting our skills pipelines. The Government’s central focus on developing a new, sustainable skills base is welcome, but more must be done.

My direct ask of the Government therefore is to fulfil the promise they made last year to fully review, and fix the apprenticeship levy. Build this into their Spring Statement.

Flexibility is key. Rules on the length of training are prohibitive. High-quality booster courses, complementary training programmes and shorter units to upskill existing employees rapidly into a different discipline would all have fast and positive effects. Incentivise industry leaders to lead their industries. Enable larger employers to use the levy to mentor and support SMEs which often make up their supply chains.

Across the industry, incredible feats of engineering and construction are delivered every day. But the industry is evolving, becoming progressively more diverse and increasingly modern, embracing digital tools that require a wide range of technical skills needed to drive forward the pipeline of mega-projects in the UK.

As the industry evolves, so too must our approach to attracting and retaining new talent. In spite of pockets of excellence following significant investment by companies including Balfour Beatty, the construction and infrastructure industry as a whole remains one of the least digitised industries in the economy.

This has a significant impact not only on the sector’s (and the UK economy’s) productivity, but also on its ability to tackle skills shortages, drive sustainability improvements and increase collaboration throughout the supply chain.

Therefore, transforming the levy spending rules into a more user-friendly “skills levy” would make it truly responsive to employer needs, maintaining the intent of the funding while allowing employers to match the available funds to the most appropriate training to address specific skills gaps in their workforce and supply chain. Increasing flexibility in this way would play an important role in upskilling the UK.

At Balfour Beatty, we take responsibility for talent in our sector by going over and above what’s required. For a start, 6.2pc of our workforce are apprentices, graduates and trainees. In addition to supporting our early careers talent and broader learning and development across all levels of the company, we also spend £5m a year on technical training.

Having started my career as a Balfour Beatty graduate, I know these positions can build future leaders. So I am particularly passionate about increasing the number of earn and learn positions we offer. Combined, these changes would be the true “silver bullets” to equip the construction and infrastructure industry with the skilled workforce essential to drive economic growth, our green transition, net-zero goals and long-term energy security.

Apprenticeships are our future. Let us not forget that.

Leo Quinn is the chief executive of Balfour Beatty and founder of The 5pc Club