Source · Select Committees · Education Committee
Recommendation 32
32
Paragraph: 91
Employer investment in training is in decline, with low paid, low skilled workers hardest hit...
Conclusion
Employer investment in training is in decline, with low paid, low skilled workers hardest hit by the decline. A skills tax credit to incentivise employers to invest in training for workers with no or low qualifications will help to revitalise employer- led training.
Paragraph Reference:
91
Government Response
Acknowledged
HM Government
Acknowledged
84. As part of the current tax system, training expenditure for directors and employees can be claimed as a deduction when calculating taxable business profits, provided that it helps improve the skills and knowledge used in the business. Within the skills system, the Government is supporting employers to make a long-term, sustainable investment in apprenticeship training with the Apprenticeship Levy which is an important part of our aim to raise apprenticeship quality. 85. Apprenticeships are a job with training that can benefit people of all ages and backgrounds at all stages of their careers, including those with low or no prior qualifications. As part of Spending Review 2020, the government made £2.5 billion of funding available for employer-led apprenticeships. 86. The Government provides financial support to businesses to support the training of apprentices by covering 95% of the apprentice training costs incurred by non- Apprenticeship Levy payers (often SMEs), whilst Apprenticeship Levy payers can cover the costs of their apprentices using the funds in their apprenticeship service account. Income from the Apprenticeship Levy is used to fund new apprenticeships for employers that do not pay the Levy, as well as funding existing apprenticeships that started in previous years. 87. The Government has made significant investments in skills and training to help adults build the skills they need to get into work. In the Plan for Jobs, the Chancellor announced funding to increase the scale of traineeships and sector-based work academy placements, incentives for apprenticeships, investment in the National Careers Service, and funding for school/college leavers to study high value courses. 88. At the 2021–22 Spending Review (announced November 2020), the Government announced an additional £375 million investment in adult skills funding to continue the measures in the Plan for Jobs into 2021–22 and deliver the PM’s Lifetime Skills Guarantee which includes funding for all adults to obtain their first full Level 3 qualification (A Level or equivalent) and to expand the employer-led skills bootcamps model across England.