The UK government’s new Skills and Growth Levy represents a major shift in how businesses, including those in financial services, approach skills training and workforce development. While many details remain uncertain, one thing is clear: the levy has the potential to reshape the sector’s approach to talent development. However, for this opportunity to be fully realised, employers in financial services must engage actively with the policy-making process, advocate for their specific needs, and clearly define the types of training that will drive real value for their businesses.
The Skills and Growth Levy: more than just a tax
The Skills and Growth Levy is designed to close the UK’s skills gap and drive economic growth by encouraging employers to invest in workforce training. It is expected to build upon or replace existing frameworks like the Apprenticeship Levy but will encompass a broader range of training initiatives beyond apprenticeships, including upskilling and reskilling in key areas such as digital and green skills.
For financial services, the levy presents a unique opportunity to access funding for critical skills development—but only if employers make their needs heard.
For financial services, the levy presents a unique opportunity to access funding for critical skills development—but only if employers make their needs heard. The financial services sector, more than many others, operates in a highly regulated environment with specific skill requirements that are essential for compliance, innovation, and maintaining competitive advantage.
Opportunities for financial services employers: the power of strategic engagement
Defining specific training needs: The one-size-fits-all approach of government-funded training programs is unlikely to meet the nuanced needs of the financial services sector. Employers need to advocate for training that is not only relevant but also tailored to their strategic objectives. For example, bespoke, tailored training designed to meet specific business needs or to address particular regulatory requirements may not currently be fundable through the existing Apprenticeship Levy. However, employers who clearly articulate the value of such training could influence future funding guidelines.
Focus on professional and vocational qualifications: Financial services have long valued professional qualifications, such as those offered by the Chartered Financial Analyst (CFA) Institute, the Chartered Insurance Institute (CII) and the International Compliance Association (ICA). These qualifications provide the technical knowledge and ethical grounding essential for the sector. Employers should push for the levy to support these types of qualifications, which directly contribute to meeting the industry’s skill demands.
Upskilling current staff: This new levy offers a significant opportunity to upskill existing employees, preparing them to take on new roles and responsibilities within the organisation. Upskilling is particularly valuable in financial services, where roles are increasingly being shaped by digital transformation, regulatory changes and evolving customer expectations. Employers need to ensure that the levy can be used to fund programs that keep their workforce adaptable and compliant with Financial Conduct Authority (FCA) requirements, including the Consumer Duty.
Training new entrants and cross-skilling: The financial services sector has a critical need to bring in new talent and reskill individuals from other sectors or different areas within financial services. Whether it’s training someone new to the industry or helping an employee transition from, say, compliance to a tech-focused role, employers must advocate for flexible funding that supports such diverse training pathways. This approach can help fill skills gaps more dynamically, especially as the sector evolves.
Supporting regulatory compliance: The Skills and Growth Levy could play a vital role in helping businesses meet their obligations under FCA regulations, particularly the new Consumer Duty, which requires firms to act to deliver good outcomes for retail customers. Training that enhances employees’ understanding of consumer protection, ethical standards, and regulatory compliance is not just beneficial but necessary. Employers must lobby for the levy to include funding for compliance-related training, which could reduce risk and enhance customer trust.
Threats: a missed opportunity if employers don’t engage
While the Skills and Growth Levy holds promise, it also poses risks, particularly if financial services employers fail to make their voices heard. The constraints typically associated with government-funded training could mean that highly specific, valuable training – like bespoke courses developed for particular business needs – might not qualify for funding. If the sector does not clearly communicate its requirements, it risks being left with training options that do not align with its strategic needs.
Moreover, without active engagement from the sector, there is a risk that the levy could end up as just another cost burden rather than a valuable investment in workforce development. Smaller firms, in particular, might find themselves paying into a system that does not provide the tailored support they need and maximise the return on the compulsory levy.
The Skills and Growth Levy is more than just a mandatory contribution; it’s a chance for financial services to redefine how they invest in their people. By speaking up now, employers can help ensure that the levy supports the sector’s unique needs, driving both business performance and regulatory compliance. The stakes are high, but with strategic engagement, the rewards could be transformative.
The CSA is the only national trade association in the UK for organisations active in the debt collection and purchase industry, and an award-winning learning and development specialist and an Approved Apprenticeship Training Provider. www.csa-uk.com/csa-learning
