New research reveals that the government’s decision to cut levy funding of Level 7 apprenticeships for apprentices aged over 21 from January next year, will cost UK employers around £214m* in additional training costs.

With 89 percent** of Level 7 apprentices aged over 21, research from the University Vocational Awards Council (UVAC), the higher and degree apprenticeship voice for over 80 universities, also reveals the extent to which cuts will widen the skills gap, hinder social inclusion and stifle economic growth.

Level 7 apprenticeships, which are the equivalent to a Master’s degree and proven to enable firms to upskill and develop future managers, business leaders or fill specialist roles, comes at a time when they are increasing in popularity.

The latest data from UVAC reveals that year-on-year Level 7 apprenticeship starts have risen 13% in the last three years and five percent in the last 12 months – underlying their importance to businesses across the UK.***

In addition, the National Foundation of Educational Research had previously found that 90% of roles within firms across all sectors will require higher-level skills by 2035, highlighting how more employers than ever are dependent on degree apprenticeships at levels 6 and 7.

Dr. Mandy Crawford-Lee, chief executive for UVAC commented: “The government’s policy to remove vital levy funding – that is supporting nine in ten Level 7 apprentices – is a major blow to employers and will leave them facing both huge training bill costs and a skills shortage headache.

“This funding black hole is at a time when Level 7 apprenticeships have been growing in popularity year-on-year and are critical to driving wider economic growth. They’re also proven to enhance social mobility – giving individuals from underserved communities a clear career pathway, access to higher education and the skills to achieve their full earning potential in senior-level positions.

“This new policy ultimately feels like a contradiction to Labour’s Industrial Strategy, where it insists there will be ‘no glass ceiling on the ambitions of young people in Britain’.”

Although government spending on Level 7 had stagnated under the previous government over the last three years, it still accounted for around 10 percent of the Department for Education’s overall apprenticeship budget.

Dr. Mandy Crawford-Lee added: “Removing funding for those Level 7 apprentices aged over 21 indicates to us that the government is unfortunately not looking to prioritise the career and skills progression of employees at every stage of their working life.

“It’s disappointing that the government places such little emphasis on the link between skills and productivity. We simply don’t believe that reducing Level 7 funding eligibility will make lower-level apprenticeships more attractive to employers, or more importantly – reduce the number of young people not in employment, education or training (NEETs).

“It would seem that tackling NEETs is now the government’s policy priority at the expense of developing the skills provision needed for a highly skilled, world-beating economy.”

 *Estimate based on £240m (DfE data) and 89% (DfE) of Level 7 apprentices aged over 21 and no longer eligible for Apprenticeship Levy funding

**DfE stat

***Higher Education Reporting in Apprenticeships (HERA) data commissioned by UVAC