Reuse wasted Apprenticeship Levy funds to plug £63 billion digital skills deficit

WASTED Government funds should be directed to nearly 50% of engineering firms suffering from a digital skills gap, says the Institution of Engineering and Technology (IET), as a digital skills deficit is costing the UK economy £63 billion a year. In a fresh review by the IET of skills within engineering and technology; a key sector to help the UK reach its net-zero targets; shockingly 47% of employers report a technical skills gap within their current workforce, with 45% of those specifying a lack in adapting to new equipment or IT skills. Almost all (92%) engineering and technology employers with a digital skills strategy require additional skills to deliver the strategy across innovation, agile thinking and management skills.

With many skills gaps resulting in vastly reduced productivity, innovation and growth, the IET's Skills for a Digital Future survey calls for Government to look at ways to prioritise unspent funding to meet demand for the future. This could involve making the Apprenticeship Levy more flexible for employers, so that they can upskill and reskill employees to plug the UK's growing digital skills gap.

Over £2bn raised by the Apprenticeship Levy has been returned to the Treasury since its introduction in 2017. In that time, the number of new apprentice starts has fallen and employers are spending less on training per employee in real terms. In many cases, the levy is transferring money away from training opportunities; up to ⅔ of employers are not using their levy entitlements.

Skills in emerging technologies are expected to be more important than ever in the future, such as artificial intelligence (36%), extended reality (22%) and quantum engineering / computing (22%). Looking ahead to the future, 31% of employers say that artificial intelligence / machine learning will be important to sector growth. However, 50% of these employers say they do not have don't have the necessary skills in this area.

Dr Graham Herries, chair of the IET's Innovation and Skills panel, said:- "The UK's digital skills strategy must align with the needs of employers. The findings of this survey point to 3 key actions for Government. These include funding for upskilling and reskilling; which could come from using the unspent apprenticeship levy; providing sustained support for skills in emerging technology by seeing training as an investment; and providing targeted support for SMEs, who may find it more challenging to provide training. While digital skills must be integrated into STEM learning, over 80% of 2030's workforce is already in work. Reskilling the current workforce must be a major part of the solution. Most employers support this; 74% of engineering employers view their staff as:- 'agile' and generally respond to skills gaps by providing more training, rather than hiring externally. Boosting the UK's digital skills capability can unlock our huge technological potential and boost growth."

To address the skills shortage, employers think on the-job training (63%) is more effective than formal qualifications (35%) or e-learning (21%), with 44% of employers already giving their employees digital skills training. However, large companies (58%) are more than twice as likely as SMEs (27%) to provide this.

This is the 16th year that the IET has published a skills report. The fieldwork was conducted online with 1,235 senior decision makers in engineering organisations between:- 27 September and 30 October 2022 by market research agency YouGov. The IET will be presenting the findings of its survey to parliamentarians at The Parliamentary and Scientific Committee , on:- Tuesday, 7 February 2023. The IET's Skills for a Digital Future is available on the IET's website.

Boost your childcare budget this half term

AS the February half term draws closer, families are being reminded that they can save up to £2,000 a year on childcare costs with Tax-Free Childcare. More than 52,300 families in the North West used the scheme in September 2022 and benefitted from the Government paying towards childcare costs. HM Revenue and Customs (HMRC) is encouraging families to find out more about Tax-Free Childcare and check their eligibility via Childcare Choices.

Tax-Free Childcare can help working families pay for any approved childcare for children aged 11 or under, or, 16 if the child has a disability; whether the child goes to nursery, a childminder, attends breakfast or after School club, has holiday care or goes to an out of School activity. 

For every £8 paid into an online account, families will automatically receive an additional £2 from the Government. Parents can receive up to £500 every 3 months (£2,000 a year), or £1,000 (£4,000 a year) if their child is disabled.  

Opening a Tax-Free Childcare account is simple and takes around 20 minutes. Money can be deposited at any time and can be used straight away, or whenever it is needed. Unused money in the account can be withdrawn at any time. Go to GOV.UK to register and get started. 

Victoria Atkins, Financial Secretary to the Treasury said:- "Tax Free Childcare can make a big difference to household budgets and I urge families to make sure they are getting the help they are entitled to. It is a simple process; go online today, set up an account and start making real savings on your childcare costs."

Myrtle Lloyd, HMRC's Director General for Customer Services, said:-  "We want to help working families and by using Tax-Free Childcare, they can use the Government top up to make their money go further. Search:- 'Tax Free Childcare' on GOV.UK to find out how it could help you." 

Families could be eligible for Tax-Free Childcare if they:-

►  Have a child or children aged 11 or under. They stop being eligible on 1 September, after their 11th Birthday. If their child has a disability, they may get up to £4,000 a year until 1 September, after their 16th Birthday. 

►  Earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average.

►  Each earn no more than £100,000 per annum.

►  Do not receive Tax Credits, Universal Credit or childcare vouchers.

A full list of the eligibility criteria is available on:- GOV.UK.  On the site families can learn more about the childcare offers available to them and what support they're entitled to by visiting Childcare Choices. The Government is offering help for households. Check GOV.UK to find out what cost of living support, including:- help with childcare costs, families could be eligible for.