Election 2024: What next for marketing apprenticeships?

Apprenticeships are becoming a politicised issue, with Labour criticising the “failed” levy and the Tories slamming their rival’s plans. What can businesses expect?

ApprenticeshipAs the UK gears up for the General Election on 4 July, parties across the political spectrum believe major shake-ups to the apprenticeship system could prove a vote winner with business.

Trading barbs over what is fast becoming a politicised issue, the Labour Party accuses the Conservative government of operating a “failed” Apprenticeship Levy. The Tories, however, claim their election rival’s “ill thought through” plans would halve the number of apprenticeships.

The current Apprenticeship Levy equates to 0.5% of an employer’s annual wage bill and only applies to businesses with an annual wage bill of more than £3m. Any unused levy funds expire after 24 months and are returned to HMRC.

If elected, Labour intends to pivot to a ‘Growth and Skills Levy’. Companies would be able to use up to 50% of their levy contributions on non-apprenticeship training for existing staff, with the other 50% reserved for apprenticeships.

Skills England would hold a list of approved qualifications on which businesses could spend their levy money, including modular courses in priority areas such as digital and green skills.

It’s time for the government to pick up the pieces and reassess the system to ensure companies can really unlock the potential of apprenticeships.

Maggie Jones, CIM

While Labour’s manifesto is yet to be published, when setting out its five key missions in February the party claimed businesses keen to upskill existing staff are being held back by a “lack of flexibility” in the current system. The party argued £3.5bn in funding has gone unspent since the levy’s inception in 2017.

By contrast, the Tories have pledged to scrap so called “rip-off” degrees in England to help fund 100,000 apprenticeships a year by the end of the next Parliament. The party estimates the government would save £910m by 2030 if it scrapped university courses that teach roughly 13% of students.

Whether any of this messaging will cut through at the ballot box is open to debate. CEO of The Marketing Academy Foundation, Daryl Fielding, doubts arguments over the Apprenticeship Levy are keeping the general public up at night.

“I imagine the reason it is in the election discourse is about demonstrating you are a business-friendly party and in general Labour has always had more work to do to demonstrate that than the Conservatives,” she says.

“If Labour are coming out with a policy to say businesses can use this money in a different way, arguably they’re doing that to signal to businesses they are supportive of their agenda. That wasn’t the original reason the Apprentice Levy was introduced and if they still want to adhere to the original purpose then looking at why employers are not using the levy would be a better way of tackling the notion apprenticeships are broken.”

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Director of qualifications and partnerships at the Chartered Institute of Marketing, Maggie Jones, welcomes the political focus shifting towards providing the UK marketing sector with the support it needs to thrive both domestically and globally.

Keen that young people are not lost in the conversation, Jones points out the pandemic pushed apprenticeships off the agenda.

“As the UK looks to recover, such investment in core training has never been more important. Entry level training plays a crucial role in improving social mobility, addressing skills shortages and creating opportunities for young people who have been alienated from the job market. It is also key to the acquisition and retention of talent for organisations,” she notes.

CIM research from 2021 found 71% of 16-24 year olds felt they had missed out on training opportunities as a result of Covid disruptions, while four in ten were forced to fund training themselves. Over a third (36%) of the students surveyed reported feeling less confident in their abilities since the pandemic.

“Today, young people are still crying out for the support and access to resources needed to succeed and, as a marketing industry, we must urgently respond by offering more opportunities,” Jones adds.

“It’s not just businesses that need to act. For a long time, many industries have called on greater flexibility to their levy spend. Now, it’s time for the government to pick up the pieces and reassess the system to ensure companies can really unlock the potential of apprenticeships.”

Original intention

According to Marketing Week’s 2024 Career & Salary Survey, a fifth (20.1%) of the more than 3,000 marketers surveyed say their business doesn’t operate a marketing apprenticeship because it requires too much time and resource.

A further 14.4% say their business does not currently see the value in apprenticeships, while 5.7% say they can’t get buy-in at the highest level for such an initiative and 5.5% argue it is too complicated to develop a programme.

Given the complexity of the current system, Fielding acknowledges the Labour proposals could incentivise brands to use the 50% levy funding to upskill existing staff and then return the remaining 50% to the government without attempting to introduce an apprenticeship scheme.

Indeed, she points out many companies already use the levy to upskill existing staff, which she argues was never the original intention.

Launched in 2017, the Institute of Apprenticeships and Apprenticeship Levy were intended to deliver the skills employers need and played into the Conservative government’s pledge to deliver 3 million “quality apprenticeships” by 2020.

Looking at why employers are not using the levy would be a better way of tackling the notion that apprenticeships are broken.

Daryl Fielding, The Marketing Academy Foundation

Speaking on the launch, then Skills and Apprenticeships Minister Robert Halfon described the levy as helping to ensure “people of all ages and all backgrounds get their foot on the ladder of opportunity”.

If the point was to offer different pathways into work beyond university, allowing companies to upskill existing staff does nothing to shake up the business as usual focus on graduate recruitment or incentivise companies to make apprenticeships work, says Fielding.

“If you want to say: ‘We’ve taxed businesses and now we’re going to use the tax for something else because businesses are complaining’, you’re setting a different objective for that money,” she argues.

“That’s a legitimate action of any government, but then what? You won’t have done anything to solve the underlying problem which is how do we incentivise companies to take on non-graduates and train them on the job, as opposed to academically.”

Fielding points to another issue ripe for reform. Under the current system, companies employ an apprentice five days a week, but they work on the job for four days as 20% of their time is earmarked for study. The major cost of taking on an apprentice is their wage, as the levy can only be used to fund training not the salary.

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“Even if you said the levy will be used to fund a fifth of their salary, that would be something that might incentivise employers to be more minded to take on an apprentice,” she suggests.

“If you’ve got somebody with a degree you pay them for five days, you get five days work out of them putting it bluntly. If you take on an apprentice instead you’ve got to let them go for a day.”

Fielding urges any incoming government to trust business and reduce the administrative burden associated with statutory apprenticeships, making the bureaucracy “lighter touch”. Taking this kind of approach would, she argues, “unleash the system”.

Whichever party makes it to Downing Street, a shift in mentality is needed if businesses – and wider society – is to fully tap into the power of apprenticeships, says Fielding.

“If more companies embraced apprenticeships as a way of bringing in bright entry level talent they would massively benefit. It would be a good thing for society, because you wouldn’t have a young person saddled with lots of debt [from a degree]. A lot of that debt will be written off and that will cost the taxpayer,” she points out.

“I’m much more minded to adopt that argument and to incentivise companies to modify their entry level talent tactics, as opposed to just divert the funds to benefit a different cohort of individuals.”

Opening Up brandingMarketing Week’s Opening Up campaign is pushing for the democratisation of marketing careers. Read all the articles from the series so far here