Levying up - invest in skills through unused funds

This Op-Ed from Vice-Chancellor Robert Van de Noort was published in The Times on Monday 10 May.  

In Japanese pottery there is a term, Kintsugi, which translates as ‘golden joinery’, where broken ceramics are fused back together with gold, making it not only whole again, but also extending the pot’s experience and increasing its importance and value.

In the field of higher education I tend to think a lot about experience. How do we ensure that our students all get a valued experience from their degrees? What can we learn from experiences in our sector to make sure my institution, the University of Reading, is supporting our region to flourish?

I have also been around long enough to think about what experiences young people had in 2008, at the height of the last major economic recession. Young people were among the worst affected by the economic shockwaves brought about through financial markets collapsing and that impact was still being felt by generations of people in and out of work, through depressed wage growth and increased inequality, as the world began to learn about a new coronavirus at the start of 2020.

Now we find ourselves facing a deeper challenge caused by the global pandemic, which once again disproportionately affects the economic prospects of young people.

The experience of 2008 tells us that we need to act urgently and innovatively to limit these scarring effects on jobs, on productivity and on skills.

It is with this urgency that I have written, along with other Vice-Chancellors, Students’ Union Presidents, Local Enterprise Partnership chairs and business leaders to the Government to call for action.

Like a chipped and much-loved ceramic pot, our regions are working hard and contributing to our national effort, but there are gaps. These gaps, in skills and productivity, are holding businesses and our economy back from being able to flourish. At the same time, current schemes to support lifelong learning and adult skills such as the apprenticeship levy scheme have been inflexible for many businesses, small and large alike, to use on funding skills.

In 2019, a report by the Open University suggested that up to £3bn of Apprenticeship Levy funds remains unspent, and in the Thames Valley Berkshire area alone more than £60m of money that businesses are required to set aside in apprenticeship levy pots is being unused and with no clear prospects for transfer to SMEs.

The pandemic has also affected plans by businesses and organisations for using their apprenticeship levy pot, with significant challenges in delivering apprenticeships including problems with moving their programmes to a working-from-home model. Investment in upskilling and reskilling will give a significant boost to economic growth and yet, we are seeing a growing skills gap in digital technology and persistent gaps in key sectors.

We welcome the Government’s commitment to levelling up, and the Skills for Jobs white paper outlines reforms to post-16 education and training includes promising recommendations to look at more flexibility for using apprenticeship levy pots. However, the need to respond quickly and innovatively to the challenges of the pandemic mean that more can be done to urgently reskill and upskill people to meet the skills and productivity gaps in our regions.

As a group of employers, business leaders and those who are focused on supporting a skilled workforce in our region, we are calling on Government to consider a limited expansion of the apprenticeship levy funding model for two years of post-Covid recovery. The pilot would enable businesses and education providers to cooperatively use money for shorter, more flexible skills-orientated interventions to help young people including graduates play more of a role in economic recovery.

The gold is sitting there ready to be used to fill in the gaps to make our national skills investment better and stronger.

(Read more about the letter to Government calling for greater flexibility in the apprenticeship levy fund scheme to support skills)