The Institute has raised concerns with the government over its proposal to remove levy funding for Level 7 apprenticeships – including the accountancy or taxation professional apprenticeship which is a popular route for those pursuing careers in accounting – and the significant consequences it could have for the UK jobs market.

Instead of creating jobs in the UK, the cost effectiveness and increased use of labour in countries such as the Philippines, South Africa and India would encourage businesses to offshore this work abroad, ICAEW warned.

Proceeding with these reforms would also contradict the government’s growth agenda – and “risk significant unintended economic and social consequences”, the Institute added, citing member feedback about such a move.

In the accountancy sector, each new Level 7 apprenticeship effectively equates to a new UK job, ICAEW explained, as the programme is rarely used to upskill existing staff. Accountancy was also identified as a key growth-driving sector in the government’s new UK industrial strategy, so removing funding for accountancy at the grassroots level would be “illogical”, it added.

Additionally, removing funding would also reduce the talent pool available to companies, particularly in industries critical to economic growth, the Institute warned. Level 7 apprenticeships, which are primarily utilised by young people, play a pivotal role in driving social mobility, by offering an accessible pathway into the profession for people from all backgrounds.

Since the introduction of the Apprenticeship Levy the number of school leavers entering accountancy has doubled, which is further proof that Level 7 is a tried and tested route for getting more high-level skills into the economy. In 2022/23, there were 9,600 Level 7 accounting and taxation starts, with 79% of ICAEW apprentices aged 24 or under.

Alan Vallance, ICAEW Chief Executive, said:   

“We’re deeply concerned that the impact of removing levy funding for Level 7 apprenticeships will be damaging for professional and technical skills in the UK economy and have a far-reaching impact across accountancy and other growth-driving sectors.

“The unintended consequences include the loss of highly-skilled domestic training roles to offshoring, which our members and employers tell us is a very real possibility, a widening skills gap and reduced social mobility. All these factors risk diminishing the ability of UK businesses of all sizes to help achieve the fastest growth in the G7.

“In short, we fear that detrimental reform could result in new jobs being lost, which would undermine the government’s pledge to boost economic growth. 

"Therefore, we urge the government to reconsider this proposal so that young people can continue to access Level 7 funding in order to gain vital skills, essential to the growth of the UK’s wider economy.”

ENDS

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