Written evidence from Multiverse (SFF0060)

About Multiverse

Multiverse is the UK’s first edtech unicorn and the second-largest provider for apprenticeship starts.

We have trained over 16,000 apprentices and worked with over 1,500 employers in some of the fastest-growing sectors of the economy, such as Microsoft, Vodafone and Citi, as well as those in vital public services, such as the NHS. We specialise in apprenticeships that are vital to economic growth in areas like Artificial Intelligence (AI), digital analytics and software engineering. Our work has given us a clear perspective on the skills needed by organisations today.

1. What kinds of skills do you think will be needed for the future of the UK economy? Is the UK’s skills and training system capable of equipping increasing numbers of people with these skills?

The UK economy is undergoing significant change, driven by advancements in artificial intelligence (AI), digital analytics, and automation. These technologies are transforming industries and altering the skills required by the workforce. AI, for example, is expected to contribute up to £550 billion to the UK economy by 2035, as reported by Microsoft.[1] However, it will also lead to significant changes in the labour market, with some job roles disappearing while others will proliferate. Data shows that 83% of UK business leaders expect 25% of their workforce will need reskilling within the next three years.[2]

To make the most of these opportunities, the UK's skills systems must focus on upskilling and reskilling workers to ensure long-term economic success. Workers increasingly need to develop skills centred on digital literacy, data analysis, and AI. As highlighted by Skills England, less than a third of UK businesses are confident that they will be able to access the digital skills needed in the next 3-5 years.[3] Our polling shows 82% of people are interested in additional training to help them adapt to technological change.[4]

Beyond digital skills, there is an increasing need for green skills, vital for addressing climate change and supporting industries moving towards sustainability. Employers are also seeking workers with soft skills, such as adaptability, problem-solving, and collaboration, which will remain important even as automation reshapes job roles.

The UK’s education system is not currently meeting these demands. Traditional education routes, such as university degrees, are not producing enough workers with the required skills. To take one example, a previous government study on the digital skills gap indicates that 178,000 jobs require hard data skills, but the number of data science graduates is expected to be fewer than 10,000 per year.[5]

There is also a need for a much greater focus on reskilling and in-work training, with rates of public and private investment in training having fallen sharply in recent years. Currently, 7.5 million adults in the UK are estimated to lack essential digital skills - a figure that far exceeds the number of new entrants into the workforce by 2030 and shows we cannot recruit our way out of this challenge.[6] [7]

To address the skills gap, the UK's skills and training system needs to become more flexible, allowing people of all ages to access modular and on-the-job training programmes. Apprenticeships are an effective and popular way to meet specific workforce needs, combining learning with practical experience. Employers prefer this approach over traditional education, with 50% of business leaders ranking professional apprenticeships as the best way to develop skills for their future workforce.[8]

2. What is the appropriate level of government intervention in the development of skills policies? What should the Government’s proposed post-16 education strategy include in relation to apprenticeships and training?

The government’s role should be to create a skills system which ensures access to high-quality training for all individuals, whilst giving employers sufficient flexibility within this to access training that meets the needs of their workforce. 

On apprenticeships and training specifically, we welcome the Growth and Skills Levy proposed by the government as a positive step, which would allow employers to invest their Levy funds in a broader range of training options, including beyond apprenticeships.

To maximise its effectiveness and mitigate against potential risks, we believe it should be guided by four principles so that it is:

●       Employer-led: putting employers at the forefront of addressing workforce skill needs by allowing them to choose the eligible provision most appropriate to them. Training funded by the Levy should take what is great about an apprenticeship and focus only on employees undertaking on-the-job learning and the skills required for a specific occupation. It should be delivered in the workplace and demonstrate positive economic return.

●       For everyone: enabling workers of all ages to learn new skills throughout their careers, regardless of where they live and ensuring policy is kept consistent across England, to avoid a ‘postcode lottery’ of access to skills.

●       Easily accessible: minimising barriers which limit the uptake of training, including appropriate and proportionate regulation and flexible delivery. This includes reducing current barriers to apprenticeships, such as their length, and maintaining quality while removing regulatory requirements that limit how businesses can use them.

●       Excellence-driven: delivering only high-quality in-work training by maintaining high standards for providers and criteria for training. This should ensure Levy funds are used for additives for individuals, and not diverted to pay for general workplace training like health and safety.

By embracing flexible, employer-led training and leveraging cutting-edge technology, we can empower the workforce with the skills they need to succeed and drive the UK's economic future.

3. Are existing Government policies on skills, particularly apprenticeships and training, sufficiently clear? Have policies, funding, and the institutional set-up been sufficiently consistent over time? If not, what changes or reforms would you recommend?

It is important that reforms build on the successful elements of the current system, including the introduction of apprenticeship standards and the link between training and a clear map of occupational requirements for different roles, and focus on aspects of the system that are not working well.

In particular, there is a need to reform rules which do little to improve the quality of training but hold back employers and individuals from engaging with it. We welcome the government’s announcement of the introduction of shorter apprenticeships, and it is important that these flexibilities be extended to apprentices of all ages and apprenticeships which focus on digital skills.[9] We would also recommend taking advantage of technology that allows people to learn at their own pace, and removing the requirement to pass and evidence Level 2 maths and English to complete an apprenticeship, which is an unnecessary barrier for many apprentices and not a requirement of other technical qualifications, such as T Levels.

There also needs to be greater transparency around how the government and employers collectively contribute to the system. There should be a clear and transparent link between the new Levy and the Department for Education's apprenticeship budget, with employers having full access to their Levy contributions, and the expected increase in Levy receipts in the coming years being made fully available for them to invest. Instead of restricting demand via complex apprenticeship rules, the new Levy should aim to maximise employer investment in apprenticeships and other high-quality training options.

The current system has also been criticised as being too complicated for employers to engage with. As the scope of training funded by the Levy expands, there is a risk that this increases. To avoid this, non-apprenticeship training funded by the Levy should not replicate the current regulatory requirements for apprenticeships. Expanding these requirements to a broader range of training options would discourage engagement from employers and training providers, slow implementation, and undermine the goal of creating a more flexible system. Instead, regulations should be tailored to the type of training offered.

Finally, the regular, sometimes last minute, changes to the system since the introduction of the apprenticeship Levy has made it difficult for employers and providers to plan. It is vital that the new system announces changes well ahead of time and aims to keep them consistent over several years, to allow for more considered business and workforce planning and create greater confidence in long-term investment in skills.

4. Are the right institutions in place to ensure an effective skills system for the future? Should coordinating institutions be national, regional, or sectoral, or a mixture of each? What is your view of Government’s proposal to establish a new body, Skills England?

Policy for the Growth and Skills Levy and for apprenticeships should remain consistent across England. Existing devolution of skills policy to Scotland, Wales and Northern Ireland has already created a wide divergence of approaches across the nations of the UK and created barriers to UK-wide employers being able to use apprenticeships and training across their businesses.[10]

Though Mayoral Combined Authorities and local areas have an important role to play in setting skills strategies, Levy functions and apprenticeships policy should remain at a national level, in order to make it simple for national employers to use the system and avoid creating a “postcode lottery” of training available to support reskilling across the country.

We welcome the role that Skills England can help to play in coordinating skills provision across the country. It is vital that Skills England collaborates with independent training providers, colleges and universities, as well as with employers, to ensure that policy is co-constructed and deliverable across the whole country.

In line with the principles set out above, we think its role should be to ensure access to high quality training for all, rather than using funds from the Growth and Skills Levy to target certain groups or deliver certain policy goals for skills spending. Where the government wishes to do this, these interventions should be funded from outside the Levy in order to preserve the maximum budget available for on-the-job training.

Skills England will have a crucial role in guaranteeing the quality of training, including that funded by the Growth and Skills Levy. Skills England will also need to move more quickly than the Institute for Apprenticeships and Technical Education at updating occupational standards to respond to the evolving needs of employers. The current pace of change, where updates to standards can take up to two years, is too slow and risks leaving training in critical areas like AI out of date.

5. What should be the role of businesses in encouraging the development of skills in the UK? Should businesses be a consumer, funder, trainer, or co-designer of skills provision?

Through the skills system, and particularly the Growth and Skills Levy, the government should prioritise high-quality, on-the-job training, with businesses leading in determining the skills needed for their workforce and how this training is delivered.

An employer-led system works best because employers are best positioned to assess their skills requirements, and on-the-job training offers the greatest positive economic return. This approach aligns closely with the government’s broader goal of fostering economic growth.

Employers should therefore have a role as both consumers of training, co-funders of it through their own investment, trainers through their role in delivering on-the-job training and co-designers of skills provision through their contribution to the development of new training standards and programmes.

6. What incentives do employers have to provide training for their employees? Why do you think that employer investment in training has declined in recent decades?

Employers have a strong incentive to provide training for their employees in order to maximise the development and productivity of their workforce.

However, to maximise this role, they also require greater flexibility in training systems to increase their engagement with apprenticeships and reduce the bureaucratic burden that currently hinders investment. Existing training regulations, particularly those governing the use of Levy contributions, are seen as restrictive, limiting employers' ability to respond to the fast-evolving skills needs of their workforce. This inflexibility is one of the key reasons employer investment in training has declined in recent years.

Employers like on-the-job training because it delivers measurable economic returns and allows for targeted skills development that aligns with specific roles. However, the rigid rules around the Apprenticeship Levy, such as the 12-month minimum duration for apprenticeships and stringent regulatory requirements, prevent many employers from fully utilising these funds.

Employers need the ability to tailor apprenticeships and other training programmes to meet their immediate needs. By allowing Levy funds to be used for shorter, modular courses and removing unnecessary regulatory barriers, businesses can adopt a more flexible approach to training, which would encourage greater participation. This flexibility would also help address the digital skills gap and other emerging needs in the workplace.

7. Should further incentives be put in place to reverse the decline in employer investment in training, and if so, what form should these incentives take? Do smaller employers need greater support to access skills provision, and what form should this support take?

Employers should be encouraged to increase their investment in training by ensuring that key incentives are funded outside the Levy. It is important that the Growth and Skills Levy focuses specifically on high-quality training directly linked to employment and job-specific skills. Non-apprenticeship training, such as Skills Bootcamps, digital skills programmes, and pre-apprenticeship training, which are not tied to specific roles or are aimed at those currently out of work, should continue to receive separate funding from other government programmes.

The Department for Work and Pensions and the Department for Education already invest significant resources into programmes that help individuals into employment and provide basic skills training. This separate funding structure helps ensure that the Levy remains focused on in-work training, allowing employers to target resources effectively while the government supports broader educational initiatives.

By keeping funding for incentives outside the Levy, the government ensures that the maximum possible budget is available to deliver high-quality, employer-led training through the Levy. This strategy aligns with the goal of encouraging employers to invest more in training by keeping the system simple and directly relevant to their workforce needs. This approach also prevents the dilution of funds and avoids overcomplicating the Levy system, making it easier for employers to engage with.

Incentivising training that benefits employers directly while allowing broader skills initiatives to be funded separately will ensure a more focused and efficient use of the Levy, maximising its impact on both workforce development and overall economic growth.

8. Concerns have been raised over the operation of the Apprenticeship Levy, particularly in relation to the decline in young people taking on apprenticeships. Is there a case for reforming the levy, for example by ring-fencing more levy funding for training for younger apprentices? If so, what portion of Levy funding should be ring-fenced, and for what ages and levels of qualification?

Ensuring young people can benefit from apprenticeships is vital and boosting the numbers of young apprentices is an important policy objective.

We believe the way you do this is through reforming apprenticeships to make it easier for employers to take on apprentices, which might involve incentives funded outside the levy, rather than ring-fencing levy funding for specific age groups.

It is essential that skills reforms ensure that opportunities for training are available to everyone. Rather than ring-fencing Levy funds specifically for younger apprentices, which would limit flexibility for employers, the focus should be on making sure that all workers, regardless of their age, career stage, or location, have access to high-quality, work-based training funded through the Growth and Skills Levy.

We believe this approach should be underpinned by a Right to Reskill, which ensures workers can gain new skills throughout their careers, helping them adapt to the rapid technological changes in the workplace. By allowing employers to spend their Levy contributions in full on eligible training, the system would better support workers in developing the skills they need to remain employable and productive. This approach would also encourage employers to invest more in their workforce, benefiting both employees and the economy. Our polling shows 90% of respondents support a Right to Reskill, demonstrating widespread demand for lifelong learning opportunities.[11]

If the government aims to target specific groups, such as increasing participation among young people, this should be funded outside of the Levy. Redirecting Levy funds to specific age groups or goals would reduce the overall amount available for training and risk, decreasing the flexibility needed by employers. By keeping the Levy focused on supporting all workers, the system can remain consistent and efficient, providing more opportunities for both young people and older workers alike.

9. Should the Apprenticeship Levy be made more flexible, allowing funds to be used for shorter courses? What is your view of the Government’s proposals for a Growth and Skills Levy?

Yes, the Apprenticeship Levy should be made more flexible to allow employers to use the funds for shorter courses. This flexibility is essential in addressing the rapidly evolving skills needs in the UK workforce, especially as technology transforms industries. Employers need the ability to quickly upskill or reskill their workers in specific areas like digital and AI competencies without being constrained by the long duration of traditional apprenticeships.

The current system, with its rigid 12-month minimum apprenticeship requirement, prevents many employers from using Levy funds efficiently. Many businesses have expressed the need for modularised training that can be tailored to the pace at which individuals learn and the immediate needs of the company.

A more flexible Levy system would enable apprenticeships to be delivered in shorter, more focused segments, making it more accessible for workers and more attractive to employers who are seeking quicker returns on their training investments. Our polling shows that this would be popular with individuals as well as employers, with 79% saying they would be more likely to select courses that can be completed in stages and 74% favouring training that takes less than 12 months to finish.[12]

In implementing this flexibility, however, the government must ensure that the quality of training remains high. Non-apprenticeship training funded through the Levy should be subject to rigorous standards, similar to those applied to apprenticeship training. This will ensure that funds are spent on valuable, job-specific skills that contribute directly to economic growth. Additionally, any new rules should not lead to a reduction in the number of apprenticeship starts, but instead complement them by offering more tailored training options for employers and workers.

26 September 2024