Training levy 'will widen North-South opportunity divide'

The IPPR thinktank warned the design of the Government’s apprenticeship levy will focus benefits on areas that are already thriving.

Under the scheme, large companies will be forced to pay a levy into an account which they can then use to fund apprenticeships.

The IPPR research found 38 per cent of businesses affected by the levy are based in London and the South East - more than Yorkshire, Wales and the North-East combined - and they were most likely to create apprenticeships in the area where they already operate.

Clare McNeil, IPPR associate director for work and families, said: “The government has said that it wants to break down the barriers to social mobility faced by young people in this country. It is clear to see that young people outside of London and the South East, face a much harder time finding a first job or training opportunity - particularly those not going on to university.

“It is extraordinary then that the government has not analysed the regional impact of its new apprenticeships policy, which is likely to boost investment in training precisely in those areas where employment is higher, such as in London and the South East, leaving unemployment hotspots in the North East or Yorkshire with proportionately less funding.

“These areas are also those most likely to be hardest hit by the uncertainty facing the UK over Brexit, and the increasing impact of technological change on jobs. The Education Secretary must think again on this policy if the government is not to put even greater numbers of young people at a disadvantage simply because of where they live.”

IPPR pointed to figures showing the proportion of young people out of work and not in education or training in Yorkshire is 17.5 per cent compared to 10.7 per cent in the South East.

Bradford is among youth unemployment “hotspots” where the share of young people out of work is above 25 per cent.

The report calls for the creation of a ‘skills levy’ on companies with more than 50 staff which could raise £5bn.

Money from the largest employers would be put into regional pots to fund vocational training.

Apprenticeships Minister Robert Halfon said:“I have been clear that everyone should benefit from our reforms to apprenticeships and there is no evidence of a north south divide. We currently have the highest number of apprentices on record, with 900,000 last year and with numbers consistently high across the whole country.

“We truly are investing in the whole of England by doubling funding for apprenticeships to £2.5bn by 2019-20 – twice what was spent in 2010-11 – and giving employers more power than ever before to design training that meets their needs.

“Our reforms to apprenticeships will boost our country’s economic productivity, give everyone the chance to climb the ladder of opportunity and increase our home grown skills base.”