More than 500 young people a year could be missing out on the opportunity to start an apprenticeship in Britain’s world-leading life sciences sector because of an inflexible and expensive system for recruitment.
Apprenticeships can offer young people a route to a good, high-paying job and provide a steady stream of bright minds for the UK’s life sciences sector. The Levy is a good idea but the way it is currently set up is simply not working for the sector. Andrew Croydon
Instead of directly funding apprenticeships which provide young people better paid, more secure work and a pathway to a high-skilled career, life science firms are wasting thousands of pounds through a government Levy which fails to meet the needs of the company and leaves gaps in recruitment which could be filled by young British scientists of the future.
The pace of change occurring in medicines research and development means apprentices are in high demand from companies fighting to keep the UK at the cutting-edge of science. Apprenticeships provide practical and up-to-date skills, through on-the-job training.
With the pandemic causing economic uncertainty and unemployment at 5 per cent, the authors of a new report are urging a government re-think for how the current system works.
Since 2017, employers with salary bills over £3 million have had to pay the equivalent of 0.5% of their pay bill to HMRC every year, with the money offered back to them to fund apprenticeship provision. Anything not spent within 2 years is kept by the Treasury.
But a lack of flexibility in the system, poor quality of training provision, geographical inequality, and a lack of awareness among potential learners means just 24% of the £17 million industry-funded pot of cash for apprenticeships in life sciences has been used.
Entry level science apprenticeships typically cost employers £21,000 a year, meaning the remaining £13 million in unspent Levy funds could have funded over 500 placements for school leavers last year alone.
The report, authored by the Association of the British Pharmaceutical Industry, says that the rules for how money raised by the Levy should change to better reflect the reality of competitive research industries like theirs.
The sector currently employs 223,400 people, including 600 apprentices specifically in biopharmaceutical companies.
But companies’ ability to offer more training and apprenticeships is being hampered by stringent rules for how and where Levy funds can be spent.
Rules favour traditional sectors and ignore the specialist nature of life science, the authors say.
The Prime Minister has said that he wants the UK to be a ‘global leader’ in technology and a ‘science superpower’ where home-grown innovation drives growth, jobs and levelling up.
And while the government has already shown a commitment to apprenticeships by making £2.5bn of funding available and introducing further improvements for employers in the recent Spending Review, changes to the Levy system would help the sector reach its full potential.
One recommendation is to allow companies to better spread the cost of apprenticeships so that they do not end up with unspent money in some years and overspend in others. Many apprenticeships take place over 3 or 4 years, with a heavily weighted payment in the final year.
A further recommendation aims to deal with accidental inflexibility in the system whereby students coming into life sciences apprenticeships from an academic path are deemed overqualified. The levy cannot be used to fund an apprenticeship for a graduate with strong theoretical knowledge but lacking in the skills needed to do the job.
The Levy should also change to make apprenticeships more accessible. Currently, employers of apprentices who have additional learning support or social/safeguarding needs cannot use their Levy pots to pay for extra support needed for these workers.
The report highlights that poor quality of training and availability of good courses needs to be addressed, with 3 in 10 firms not training any apprentices because there was a lack of applicable apprenticeship frameworks and standards available for their needs.
‘Shadow apprenticeships’, which would recognise previous learning and allow people to move into and out of the industry on a more flexible basis, should be trialled.
One SME employer is quoted in the report as saying: “We’ve got a £750,000 Levy, we’ve spent 7% of it, we have a dozen apprentices (we have 800 UK employees), and we are really struggling to know what to do with it. It’s just languishing.”
Andrew Croydon, Skills & Education Policy Director at the ABPI, says:
“Apprenticeships can offer young people a route to a good, high-paying job and provide a steady stream of bright minds for the UK’s life sciences sector. The Levy is a good idea but the way it is currently set up is simply not working for the sector.
“The government is clearly committed to apprenticeships. Changing how the Levy can be spent by employers who want to do the right thing is within their interest, especially for their levelling up agenda.”
Companies should also be able to merge Levy pots following mergers and acquisitions, something which happens frequently in the life sciences sector.
The report also finds that coronavirus has had a significant impact on apprenticeships, with young people instead opting for the ‘safe bet’ of a traditional university education.
Demand for higher education has increased by 4% in 2020 vs 2019 despite three years of decreases beforehand, while apprenticeships have fallen by 50% from 2019 to 2020 nationally.
Economic uncertainty means employers are less willing to commit to new hires, instead preferring to upskill existing workers. The proportion of apprentice starters over 25 years old in all areas has increased from 55.1% in 2019 to 62.5% in 2020.
The continued success of the sector depends on a steady pipeline feeding a diverse new generation of recruits into cutting-edge research and manufacturing roles. That is why fixing the apprenticeship Levy system so that it works better for life sciences is so important.
Last modified: 20 September 2023
Last reviewed: 20 September 2023