IET Spring Budget Representation

IET Spring Budget Representation 2023: IET comments to HM Treasury on 26 January 2023.

An agile workforce needs agile support, so we are calling on the Government to reform the Apprenticeship Levy, to give employers more flexibility about how the funds it raises are spent. A flexible approach would better reflect the needs of employers and the modern economy.

We estimate that reforming the Apprenticeship Levy could cover the annual training costs of an additional 200,000 employees, generating an estimated £858m in productivity gains.

Upskilling the UK’s technical workforce is critical to delivering the government’s ambition for an innovative, high-wage economy. Although the Prime Minister has correctly identified this, gross expenditure on employee training continues to flounder alongside productivity.

As a result, England faces a shortfall of 2.5 million highly skilled people by 2030. Therefore, the IET is calling for a focus in this budget on upskilling and reskilling in order to facilitate businesses in the UK to be agile and adaptive to new technology.

Currently, most levy contributions are serving an important purpose by funding apprentice training, and that should continue to be fully supported. However, the opportunity to use unspent funds for upskilling and reskilling should not be missed.