Interview · Education & Skills
Faye Skelton on why the apprenticeship system needs fixing, not just the Levy
In conversation with
Faye Skelton, Head of Policy, Make UK
Managing Director, Bridgehead Communications
Published 2 min read
Make UK's Head of Policy on why flexibility alone will not fix the Apprenticeship Levy, and what manufacturers need from the wider system.
Key findings
- Skelton says levy receipts are expected to exceed £4 billion, against an apprenticeship budget in England of £2.8 billion.
- Make UK's analysis suggests almost £800 million of levy contributions is unaccounted for, even after funding for the devolved nations and administration.
- She says engineering and manufacturing apprenticeship starts have fallen by around 40% since the Levy was introduced.
- The maximum funding band of £27,000 can leave employers up to £8,000 short per apprentice for some critical manufacturing occupations, she says.
- She argues that foundation apprenticeships must add to technical training rather than displace it, and that the Levy should not be restricted for higher-level skills.
In 2024, Make UK’s Faye Skelton told us what a reformed Apprenticeship Levy should look like. More than two years on, she has answered a further set of questions in writing.
How has Make UK’s position changed since 2024?
The debate has moved on considerably. At the time, we were arguing for greater flexibility in the Apprenticeship Levy. The direction of travel towards a Growth and Skills Levy recognises that employers need more flexibility, but flexibility on its own will not solve the underlying problems in the apprenticeship system.
What worries you most now?
Making sure apprenticeship funding is protected. Levy receipts are expected to exceed £4 billion, while the apprenticeship budget in England stands at £2.8 billion. Our analysis suggests that, even after allowing for funding for the devolved nations and administration, almost £800 million of levy contributions is unaccounted for.
We need much greater transparency over where employers’ contributions are going. The money raised from employers for skills should be used for skills provision.
What is happening to technical apprenticeships?
They have become a bigger issue for manufacturers. Engineering and manufacturing apprenticeship starts have fallen by around 40% since the Levy was introduced. Levels 2 and 3 are the main routes for bringing young people into the sector, and providers are struggling to sustain provision.
The current maximum apprenticeship funding band is £27,000. For some critical manufacturing occupations, that can leave employers making up a shortfall of up to £8,000 per apprentice. Access to funding is only part of the problem. Manufacturers also need the right apprenticeships to be available in the first place.
So what should change?
We would put much more emphasis today on fixing the wider apprenticeship system, rather than just the Levy itself. That means properly funding apprenticeship standards and supporting training provider capacity. It also means making sure new initiatives, including foundation apprenticeships, add to the technical training manufacturers already need and do not displace it.
What about using the Levy for higher-level skills?
We remain concerned about restricting employers’ ability to use levy funding for higher-level skills. Manufacturers increasingly need higher-level technical, digital, AI, leadership and management skills. The answer should not be a choice between supporting young entrants and investing in the existing workforce. We need a system capable of doing both.
