As many as 88% of UK universities believe higher and degree apprenticeships are crucial for the newly elected Labour government to stimulate economic growth and tackle the pressing skills shortage in the UK. A survey conducted by the University Vocational Awards Council (UVAC) among its member universities examines which policy commitments and funding support the new government should provide to ensure that these apprenticeships align with employer talent requirements.

The findings

Those surveyed strongly believe that the Labour government should prolong the progress made in higher and degree apprenticeships by the previous administration, with 84% advocating for continued support for their expansion. 

Whereas financially, 64% think the new government should commit to assisting universities in addressing the cost challenges of providing these apprenticeships in collaboration with employers, as well as helping them diversify their offerings to cater to various business sectors.

Labour’s Growth and Skills Levy

As focus shifts to how businesses will help fund apprenticeships, the research examined the potential effects of Labour's proposed Growth and Skills Levy, which will replace the Conservative's Apprenticeship Levy. The current Apprenticeship Levy, funded by a mandatory 0.5% contribution from employers with payrolls exceeding £3 million, will be succeeded by this new scheme, HR News reports.

Despite concerns from levy-paying organisations across Britain, who view it as an additional business tax, 60% of universities believe that the existing Apprenticeship Levy was more effective in supporting apprenticeships across various levels, ages, and occupations compared to Labour's proposed funding solution. However, a positive note for businesses currently paying the levy is that 28% of universities think that apprenticeship funding for 16–18-year-olds should come from general taxation, similar to A levels, T levels, and Applied Generals.

Indeed, a total of 77% of respondents are worried that Labour’s Growth and Skills Levy might permit employers to allocate up to 50% of their contributions to non-apprenticeship training, potentially reducing the number of high-quality apprentices entering the workforce.

Meanwhile, supporters of the new Growth and Skills Levy believe it will enhance business operations, with 45% seeing it as a fairer deal for both large and small employers across the UK. Around 32% think it will provide more funding for higher and degree apprenticeships compared to the previous government, while 36% believe it will boost social mobility in apprenticeship access.

Furthermore, a major issue under the previous government was that around 20% of its annual apprenticeship budget was allocated to degree apprenticeships. According to 77% of universities, this allocation was insufficient to address the needs of businesses across all sectors under the Conservatives.

“Given that there is still some uncertainly around Labour’s skills policy and how it will meet its manifesto pledges, we were keen to gauge the mood of universities delivering higher and degree apprenticeships in partnership with employers of all sizes,” said Dr. Mandy Crawford-Lee, chief executive for UVAC. 

“Our survey is a real eye-opener into what the higher and degree apprenticeship landscape could look like under the newly elected government and we’d urge Labour to take on board our findings and the views of both the universities and employers responsible for their provision.”