As National Apprenticeship Week 2026 kicks off, Make UK is calling on the Government to commit to a Skills Investment Pledge to address the decline in apprenticeship starts and rise in those not in education, employment or training (NEET).
The pledge would be a clear, public guarantee that every pound collected from the Skills and Growth Levy (formerly Apprenticeship Levy) and the Immigration Skills Charge (ISC) will be spent on developing the workforce the UK needs.
Skills shortages remain one of the biggest barriers to growth and productivity for manufacturers, with around 50,000 live vacancies in the sector.
Despite record employer contributions through the Growth and Skills (G&S) Levy and the Immigration Skills Charge (ISC), billions are collected each year that are not reinvested in the skills system – effectively hitting employers with an extra tax.
Make UK’s Industrial Strategy Skills Commission found that a lack of the right local training provision was a significant barrier to employers taking on more apprentices. With a large chunk of the money – estimated to be over £1 billion – paid by businesses via the Growth and Skills Levy and Immigration Skills Charge not being used by the Government to fund training, it is within ministers’ gift to address this challenge. Without action, manufacturers fear that valuable skills training will be reduced even further.
Industrial Strategy commitments to allow G&S Levy funds to be spent on short courses are welcome. However, action is needed to address the 40% decline in engineering and manufacturing apprenticeship starts since 2017 and reported perceptions that the G&S Levy is making it harder for manufacturers to plug skills gaps.
Make UK is calling on the Government to commit to a Skills Investment Pledge – a clear, public guarantee that every pound collected will be spent on developing the workforce the UK needs.
To ensure that the revenue from skills levies is spent productively, the Government should:
Increase the supply of apprenticeships and other high-value courses through direct incentives, particularly targeted at smaller employers.
Identify ways to loosen the training criteria with a primary focus on its Industrial Strategy sectors, trusting businesses in these sectors to know how to address the skills shortages they face.
For manufacturers, the benefits would be immediate, securing vital resources to expand apprenticeships, Skills Bootcamps and Higher Technical Qualifications, and improving funding bands in high-cost technical disciplines such as engineering, and rebuild capacity in further-education providers.
Ringfencing levy funds for skills would reallocate over £1bn per year (0.1% of GDP) towards workforce development and training by 2029-30. This is a 69% increase on current government funding for apprenticeships, equivalent to around 234,000 additional starts a year.
Applying more conservative assumptions than the Government’s own estimates would still produce an annual boost to the economy worth between £4.4 and £5.9bn in the long run, driven by higher wages and employment from a more skilled workforce.
Rt Hon. Robert Halfon, Executive Director, Make UK said:
“Manufacturing and engineering apprenticeships are in steep decline, yet billions from the Growth and Skills Levy and Immigration Skills Charge are not being used by the Government where they’re needed most – risking valuable training being cut back."
"Ringfencing these funds through a Skills Investment Pledge could instead unlock hundreds of thousands of new apprenticeships, plug skills gaps, and deliver at the very least a £4.4 billion boost to the economy. The time to act is now - our young people and our sector cannot wait.”
Photo Credit: Make UK
