Chancellor reveals ‘flagship’ reforms to ensure high quality apprenticeships

25 November 2015 -

CMI’s Petra Wilton calls on employers to “put their hands in their pockets” and invest in apprenticeships to provide high quality professional managers for the future of their business

Matt Scott

Chancellor George Osborne has announced a 0.5% apprenticeship levy on an employer’s wage bill in a round of reforms aimed at improving apprenticeships and giving training power back to employers.

Revealing the Conservative government’s Autumn Statement, Osborne said the levy would be offest by a £15,000 allowance, meaning that all businesses with a wage bill of under £3m will not have to pay the levy.

Osborne described apprenticeships as “the flagship of our commitment to skills” and said the new levy would raise £3bn by 2020, funding 3 million apprentices by the end of the decade.

“It’s a huge reform to raise the skills of the nation and address one of the enduring weaknesses of the British economy,” he added.

The Chancellor also announced an increase in funding for each apprentice, and said in the spending review that Business Secretary Sajid Javid would be creating a new business-led body to set apprenticeship standards.

“As a result, we will be spending twice as much on apprenticeships by 2020 compared to when we came to office,” he said.

‘The best of all worlds’

CMI director of strategy and external affairs Petra Wilton welcomed the levy and said businesses needed to step up and take their share of the responsibility for training future generations of managers.

“If businesses want a skilled workforce then it’s only right that they pay for it,” she said. “There may be some grumbling in boardrooms about this new levy but it’s time to rid ourselves of any apprenticeship snobbery about the quality of these new routes into professional careers.

“Take the Chartered Manager Degree Apprenticeship, for example. It’s been developed by employers for employers. Delivered by universities and business schools, it ensure apprentices receive the best of all worlds: a business degree, professional Chartered status and on-the-job training.”

Wilton added that, without this investment, businesses would continue to suffer from poor leadership as accidental managers act as a drain on productivity.

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“Businesses with an eye on the future must realise the value of the upskilling of their managers,” she said. “Poor leadership and management is the biggest cause of the UK’s productivity shortfall, according to the latest OECD Total Factor Productivity figures.

“High quality professional managers don’t come for free so it’s time for businesses to put their hands in their pockets and invest for the future.”

Professor Baback Yazdani, dean of Nottingham Business School, said: "Degree Apprenticeships in Management and Leadership provide employers with an assured management talent  pipeline and provide students the ability to apply their knowledge and earn and learn at the same time. This is a winning formula for all and will help UK productivity.

"Nottingham Business School has been collaborating with companies such as Rolls Royce and Experian as well as a host of other bluechip companies for 15 years in providing such work-based degrees in Business and Management  with 100% of graduate level employability as well as accelerated career progression.  Expanding the reach of such schemes is a great opportunity for companies to boost their future leadership potential.

"We and a number of there universities have risen to this challenge and are eager to work with employers. This is a win-win for all concerned and that means a win or the country."

Find out more about the Chartered Manager Degree Apprenticeship