Local government – councils and mayoral authorities – plays a key role as place leaders for their communities and their economies, coordinating activity across communities, places, businesses and wider stakeholders.
The LGA has consistently called for a root and branch review of the Apprenticeship Levy, as councils and mayoral authorities felt it was too restrictive, and iterative changes had complicated the Levy’s use further.
In 2024, the Government announced the replacement of the Apprenticeship Levy with a Growth and Skills Levy. The LGA welcomed this and called for local government to be involved in the re-design. Ultimately, we want to see its use maximised to address workforce needs of local government as an employer as well as employers across the local economy, improve life chances by promoting social mobility and support local growth.
Government reforms
The Government recently announced a number of reforms to the apprenticeships and skills system with an ambition to develop an additional 120,000 training places by the end of this Parliament and invest over £3 billion into apprenticeships. It intends to provide opportunities for young people in key Industrial Strategy priority areas with the availability of foundational apprenticeships from August 2025, which the initial phase expected to deliver up to 30,000 new apprenticeships.
The package of reforms to the Growth and Skills levy can benefit local employers in key local and national growth priority sectors with high skilled workforce needs, including construction and the built environment, engineering and manufacturing, health and social care, and digital.
In addition to the changes to the levy, the Government has also announced measures to support local supply chains. These include funding to Mayors for construction training, free online courses for non-devolution areas, and additional funding for skill bootcamps for priority sectors. To maximise the impact of the Growth and Skills Levy for local government and their economies, we therefore call for:
- Collaboration between national and local government to help the sector maximise the opportunities of apprenticeships to help tackle skills shortages, improve service delivery.
- Enable local government to pool levy transfer contributions across multiple employers (with agreement from each participant) in a separate pot to to better plan provision across an area, address supply / demand issues, target sectors, and widen participation. This will support local skills strategies developed by councils into LSIPs, inwards investment strategies and other place-based plans or strategies.
- Allowing local government to retain and use all levy funds generated by the sector in a flexible and collaborative manner to improve local government workforce skills and capacity to help us unlock more opportunities for young people, support council staff and facilitate our programmes. This should include enabling collaboration between employers and allowing it to be spend on related activities (administration, salaries).
- Skills England to collaborate with the local government sector to develop a list of levy funding qualifications that meet the needs of the local government sector, as 94 percent of councils reporting recruitment and retention difficulties. As outlined below, the reforms to funding of Level 7 apprenticeship will have significant impact on the ability for local government to tackle some of the key workforce needs to deliver local services. This includes jobs such as Chartered Town Planners, Solicitors and Accountancy and taxational professionals.
- Collaborate with local areas to use the levy to design and commission provision that will provide the greatest impact.
- More data on local levy expenditure and provision to help inform local decisions.
The impact on local government as an employer
This is an opportunity for the local government sector to 'grow our own' and address the challenges of recruitment and retention which 94 per cent of councils report as an issue. However, the Government’s decision to remove funding from Level 7 Apprenticeships for everyone over the age of 22 will restrict the ability for local government to address skills challenges as they overlap with several Level 7 apprenticeships. 96 per cent of councils have used at least one Level 7 apprenticeship standard, with 23 different qualifications used across the sector.
The types of workforce needs include chartered town planners, accountancy and taxation professionals, solicitors and a range of specialist digital roles. Other restrictions on Level 7 apprenticeships that will impact on local government and maintained schools’ ability to address skills shortages without resorting to stretched council budgets. This will include play therapists, teacher for the sensory impaired and the new health and care intelligence specialist.
Unlike other sectors that may have significant training budgets beyond apprenticeships to replace this funding and mitigate the impact of the new restrictions, local government does not. In most cases training budgets have been cut back significantly as those funds now pay the Apprenticeship Levy. This will continue meaning more much needed funding will leave the sector, exacerbating the many workforce challenges councils face and limiting the sector’s ability to support the Government’s wider delivery agenda.