I had a frankly demoralising conversation last week with a man who runs a perfectly successful family-owned electrical contractor in Lincolnshire.
Forty-eight people, mostly men over forty, a fleet of vans, a yard that smells of warm copper. He wanted, he said, to take on three apprentices this year. Wanted, please note: he had the work, the mentors, the kit, the customer demand. He had abandoned the attempt by Christmas. The reason, in his own words, was that the system designed to deliver him three apprentices in 2026 has been built, at every level, by and for people who have never tried to use it.
And we wonder, in this country, why we have a skills shortage.
It is a year since Labour’s much-trailed “Growth and Skills” rebadging of the Apprenticeship Levy, in which the original Levy, itself only nine years old, was tweaked to allow, in principle, more flexibility in spend, more shorter courses, more so-called modular qualifications. The substance, on the ground, has been less than impressive. Some 53 per cent of all Levy spend in 2025-26 still went on “senior leader” and “level 7” qualifications, the apprenticeships-in-name-only that have for years allowed the big four accounting firms and the giant consultancies to dress up their normal MBA training as a cost to the public purse.
Meanwhile, the share of Levy spend going to under-19s, which is to say to actual school-leavers learning an actual trade, sits at less than 22 per cent. It was 50 per cent when the scheme launched in 2017. The trend is, mathematically and morally, in the wrong direction.
Why? Because the Levy, as designed, is a tax on the largest employers, who are also the most administratively sophisticated employers, who are therefore the most likely to capture the spend back through their own internal training departments by relabelling existing programmes as “apprenticeships”. It is a near-textbook example of what regulators call “capture”: the institution being regulated has more lawyers than the regulator, so the regulation eventually serves the institution. KPMG’s graduates have not, on close inspection, become better trained than they were before the Levy. They have merely become, on paper, “apprentices”, which is now a word with as much real-world purchase as “synergy”.
Down at the bottom of the pyramid, where my Lincolnshire electrician sits, the picture is the inverse. Small firms get nothing meaningful out of the Levy because they don’t pay it. The “co-investment” route, in which a small firm pays 5 per cent of training costs and the government 95 per cent, is, on paper, generous, but the funding bands are too narrow for the trades that need them most. An electrical apprentice costs about £21,000 to train properly over three years. The funding band sits at £15,000. The shortfall lands on the SME, in addition to all the time spent supervising, teaching, marking, signing off and chasing assessment paperwork.
Then there is the assessment apparatus. We have, between us, built a national vocational training infrastructure of such breath-taking complexity that even the people running it cannot tell you, with confidence, the difference between a Level 3, a Level 4, a Level 4 with end-point assessment and a Level 4 with “gateway”. There are seven separate categories of approved provider; there are sixteen categories of assessment organisation; there are over 600 standards in current use. My Lincolnshire friend abandoned the attempt to take on his three apprentices in mid-November, when he was forwarded an email from his local college informing him that his preferred end-point assessor had had its registration paused “pending revalidation”. Which assessor was paused, and why? You guessed.
Reform is not, in fact, complicated. The Tony Blair Institute, of all bodies, set most of it out in a report last summer. Cap the share of Levy spend that can go on Level 6 or above at 20 per cent, with the balance ring-fenced for under-25s. Widen the funding bands for trades. Strip out the tiered-assessor pantomime and revert to a single, simple, employer-led qualification gate per trade. Restore a meaningful share of decision-making to local economic partnerships, which know who is hiring what.
None of this is foreign. We had something approximating this, broadly, between 1964 and 1981, under the Industrial Training Boards. We threw it away in the early Thatcher years on perfectly defensible ideological grounds, replaced it with nothing for two decades, then panicked back into the present hash. The most painful thing about the apprenticeship debate in Britain is the realisation that, every twenty years or so, we re-invent the same wheel and put it on a wonkier axle.
If Labour is serious, and the rebrand suggests, at the very least, that it would like to be, it has six months to land a real reform. The Lincolnshire electrician who would otherwise be doing useful national work training three teenagers is, frankly, watching. So am I.
