The UK is precariously positioned in a race to capture the Net Zero "economic opportunity of the 21st century”. With £37–57 billion of annual UK GDP up for grabs, the public have been promised 2 million green jobs by 2030, a new responsive and collaborative skills system, and improved inclusive opportunities for young people through apprenticeships. These promises have yet to materialise. The volume of green jobs in the UK has continued to grow exponentially faster than the available workforce – creating a 'green skills gap' of more than 200,000 green-skilled workers. If unaddressed, we simply won't have the skilled workers available to turn gas boilers into heat pumps, install essential EV infrastructure or, ultimately, deliver the UK's net-zero goals by 2030.
The green skills gap can be attributed to a range of factors in the UK. While technological advancements have created volumes of specific skill requirements that are outpacing organisations' ability to react, there has been a decade-long decrease in employer investments into apprenticeships, skills, and training, despite existing and long-standing policy interventions.
The Apprenticeship Levy, whose sole purpose is to incentivise employers to invest in the skills of their workforces through apprenticeships, is one policy in particular that failed to move the dial. Recent figures show that only 4% of employers spend the full amount of their entitled apprenticeship funding – leaving up to 55.5% of funds in the levy unused over the past five years.
Employers cite several reasons for their lack of engagement: a lack of awareness, the system is difficult to access, apprenticeships often don't align with business timelines, there's excessive bureaucracy and admin, and the process is overly time-consuming. And, for those who are making use of their levy funding, funds are often redirected to focus on higher-level skills for existing employees, restricting the ways the levy is able to serve young people or contribute to the skills gap in the way it is intended to.
To blame this policies short-comings for the entirety of the green skills-gap would be wrong but its role should not be underestimated as apprenticeships are recognised as being specifically designed to address critical skills gaps with 70% of all occupations accessible via an apprenticeship.
The recently announced Growth and Skills levy is Labours first step forward in addressing the growing skills gap in England and bringing the skills system in line with the rest of the UK. A reform of the Apprenticeship Levy, it places a renewed focus on apprenticeships for young people to fast-track them into the workforce.
This reform is addressing problems in the Apprenticeship levy in three key ways:
Fundamentally, the levy is looking to incentive employers to invest in apprenticeships by giving them what they have been calling for. These changes have been welcomed by employers and guilds, however, the extent to which core problems are being addressed is limited and have a series of gaps and risks involved.