House of Lords Committee Set to Grill Ministers Over Future of Student Loans and Criticism on Apprenticeship Levy

By UK Parliament via Wikimedia Commons

This week, the ministers are scheduled to answer some questions from the Lords Economics Committee on criticism regarding the apprenticeship levy and the future of student loans.

On Tuesday, the 13th of March, the Economics Affairs Committee of the House of Lords is scheduled to interview the minister of state for apprenticeships and skills, Anne Milton MP, along with the minister of state for universities, science, research and innovation, Sam Gyimah MP.

The Committee said that among the questions that it will ask the ministers include how fair the current system on loans is, and the extent of bias of the careers information and advice provided to pupils are towards university applications.

The apprenticeship levy will also be placed in the spotlight since its introduction has been accompanied by a drop in apprenticeships.

The program was introduced last April and requires employers that have an annual pay bill of more than £3m to contribute 0.5 percent of their payroll towards a levy, for the money then to be claimed back to fund the training for current or new employees.

During a previous meeting of the Select Committee, some members of the House of Lords have already criticised the said levy, saying that its initial year in place had been “woefully inadequate.”

Some employers have been critical of the said levy, with the chair of the EEF manufacturer’s body saying last month that its impact had been “disastrous.”

Dame Judith Hackitt said that it was perceived as just another tax on businesses and that various firms have already postponed apprenticeships because of the levy.

The figures that were published last January revealed that there were approximately 114,000 apprenticeship starts for the first quarter of the academic year of 2017-2018, as compared with 155,600 for the same period the year before – a decline of over a quarter.

Meanwhile, research from the London Chamber of Commerce and Industry (LCCI) discovered that more than a third of the businesses are not aware of the apprenticeship funding scheme of the government.

The government had established the target of creating approximately 3m apprentices by 2020, and the Department for Education has previously said that the levy will “boost economic productivity, increase the country’s skill base and give millions a step on the ladder of opportunity.”

The Department for Education has also said that it may “take time” for the organisations to adjust to the new funding system, that is why conclusions should not be drawn too quickly from the initial figures on apprenticeship starts.