George Osborne's flagship apprenticeship scheme 'will deepen regional inequalities'

Posted On: 
21st February 2017

The Government’s much trumpeted apprenticeship scheme will fail to deliver in the areas that need it most and risks deepening regional inequalities, a new report has claimed.

The Apprenticeship Levy was announced by George Osborne in his 2015 Spending Review
PA Images

According to the IPPR thinktank the Apprenticeship Levy will stimulate the most training in London and the South East - while the former industrial powerhouses that voted overwhelmingly for Brexit will see little change.

Meanwhile, writing exclusively for PoliticsHome, shadow devolution minister and former apprentice Jim McMahon said: “If our economy is to prosper, a better skills offer is a must.”

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The 0.5% levy on firms, announced by then-chancellor George Osborne in his 2015 spending review, will raise £3bn a year and fund three million apprenticeships, the Government says.

But IPPR argued the levy will boost training in already highly educated areas but fail to restore employer investment to levels seen a decade ago in former industrial heartlands, nor support local devolution.

“The levy will raise less money, and stimulate training less, in the areas that need it most - the regions hit hardest by de-industrialisation, which suffer from low levels of qualification, low productivity and low pay,” it said.

“These areas also recorded among the highest vote shares for Brexit. But with public funding for adult skills cut by 40 per cent since 2010/11 and employer investment in training in decline, there is no sign of the extra investment promised to increase economic opportunity in ‘left behind areas’.”

The thinktank called for Mr Osborne’s scheme to be replaced with a ‘Skills Levy’ for firms with 50 or more staff to be better shared through a ‘regional skills fund’ - an idea backed by a cross-party group of candidates for the Greater Manchester mayoralty.

Clare McNeil, IPPR Associate Director for Work and Families, said: “The Brexit vote showed that large areas of the country felt left behind by economic change.

“But the government’s apprenticeship levy risks exacerbating the regional inequalities it has pledged to reduce.

“With Brexit on the horizon, and the increasing impact of technological change on jobs, now is the time to be investing in high quality vocational education to improve opportunities for workers.”


Mr McMahon, the Shadow Minister for Local Government & Devolution, recounted how an apprenticeship as a technician helped teach him “the importance of skills and the meaning of vocation”.

“I want other young men and women to get the same opportunities to progress in the world of work that I have had,” he wrote in an article for PoliticsHome.

“The Government here in the UK needs to do more to develop the skills of young people who do not go through university and more to help individuals update their skills throughout their working lives.

“At the same time, people need incentives to acquire new skills and employers must be encouraged to use them. If our economy is to prosper, a better skills offer is a must.”

He added: “In a post-Brexit world, the UK will have to be at its most productive if it wants to compete in the global marketplace.

“Devolution can help upskill the nation, but politicians of all parties need to make the skills agenda a higher priority.”


Paul Bogle, head of policy and research at the National Federation of Builders has responded to the IPPR report, calling on the Government to increase funding for SME's who are in a 'unique position' to tackle the skills shortage at the local level. Read the full response here.