Enterprise Bill

Written evidence submitted by Lilly UK (ENT 21)

I am writing to you in your capacity as a clerk assigned to the Enterprise Bill, to express concerns Lilly have regarding the Government's proposed Apprenticeships Levy, most notably on the definition of what qualifies as an Apprentice.

Lilly UK is the UK Affiliate of Eli Lilly and Company Ltd; a major US bio-pharmaceutical company. Lilly currently has around 2,500 staff in the UK working across three sites; a R&D base near Ascot in Surrey, a sales and marketing operation in Basingstoke and a bio-tech manufacturing facility in Liverpool.

The pharmaceutical industry welcomes the Government's efforts to promote training, and Lilly is proud to contribute to skills development and economic growth by investing in our staff. We currently employ 10 Apprentices, 25 PhDs and 53 placement students. However we have concerns that the proposed levy is a blunt tool which does not allow companies the flexibility to invest in the most appropriate skills for their staff.

In particular, we are concerned the proposed levy does not take account of other forms of training and skills development companies may offer. Most notably, Lilly currently supports 25 PhD students annually, contributing £250,000 to British universities. As the levy is currently drafted this type of skills development investment will not qualify under the levy.

Please find attached a briefing on the Apprenticeships Levy, which provides further detail on the concerns Lilly and the wider industry have regarding the proposals.

Mr Thomas Thorp
Head of Government Affairs and Communications, Europe and Canada & Senior Director Corporate Affairs and Market Access, Lilly UK and Northern European Hub
Lilly UK

Apprenticeship Levy and the Life Sciences Sector

This briefing is intended to provide information on the Apprenticeships Levy and its potential impact on the life sciences sector. The current policy fails to take into account he vast range of training programmes on offer within the life sciences industry, or the significant investment made by the sector into skills and training programmes.

Lilly believe the levy should be expanded, so that other forms of external training- such as PhDs- count towards a company's credit under the levy. Failure to do so could result in disinvestment from other forms of skills and training.

How could you help?

Whilst Lilly supports the Government's commitment to increasing the number of apprenticeships available to young people, the Levy in its current form unfairly impacts on the life sciences industry, due to the fact that the wide range of training offered does not readily fit in to the Government's description of an apprenticeship.

There has thus far been little recognition of this issue, and we are calling on MPs to raise this issue publically to ensure that it receives due recognition.

Specifically, we are looking for MPs to:

· Highlight the inherent challenges with the Levy in Parliament − principally how it fails to take into account the range of training programmes offered across the life sciences sector.

· Write to BIS ministers and use parliamentary debates and SIS questions sessions to call on ministers to meet with the life sciences industry to learn more about how the levy could be amended to take into account the range of training schemes offered by companies like Lilly.

· Ask questions of the Government on whether they have considered how the Levy would impact the life sciences [and other related and highly skilled] industries where apprenticeships are often only a minor part of company training programmes.

· Engage with the creation of the Institute of Apprenticeships to encourage the body to allow the levy to account for different forms of available training schemes.

What is an apprenticeship?

Apprenticeship programmes are currently certified from Apprenticeship Standards or Apprenticeship Frameworks covering a range of sectors. The Department for Business, Innovation and Skills [BIS] has noted that apprenticeships must be:

A job in a skilled occupation;

Substantial and sustained training, lasting a minimum of 12 months and involving at least 20% off-the-job training;

Develops transferable skills, and English and Maths, to progress careers;

Leads to a full competency and capability in an occupation demonstrated by the achievement of an apprenticeship standard;

Trains the apprentice to the level required to apply for professional recognition where this exists.

The only life sciences apprentices currently available are for laboratory technicians and in manufacturing and engineering. While these are vital roles within our organisation, it is only a tiny proportion of the high quality programmes offered by Lilly to help train the next generation of leaders in the life sciences.

For example, many life sciences companies invest in PhD and post-doc training, providing financial support for British universities. Lilly currently offers:

25 PhD student programmes, investing £250,000 annually in British universities;

10 apprentices at a cost of £149,695 per annum;

53 industrial placement students paid £17,500.

We also have an in-house training team to continually invest in the professional development of our staff throughout the organisation. By failing to allow the levy to account for investment such as that in PhD training, the Government risks penalising companies such as Lilly and hindering the objective of making the UK a world-leading place to invest in life sciences.

Additionally, Lilly is concerned that the focus of the Government's plans is on Level 2 and 3 apprenticeships, which equate to the level of a GCSE or BTEC qualification. Whilst Lilly supports the Government's plans to increase the number of apprenticeships available to young people the skills required by the industry are often at a higher level, such as degree or beyond. This equates to Level 6 and 7 apprentices. We therefore urge the Government to consult with the life sciences industry to ensure that the needs of the sector are taken into account when setting the policy. This has been recently supported by the Business, Innovation and Skills Select Committee, who raised concern about the Government's lack of consultation with industry and have argued that:

The design of the apprenticeship levy must recognise that some businesses invest heavily in training and development but have a smaller proportion of apprentices because of a smaller need in that business. It is for each employer to determine what is required, based upon their assessment of their sector. We recommend that the Government consults with industry to ensure that the apprenticeship levy is implemented in such a way as to allow sectors to invest in skills through different qualifications and training methods applicable to their specific needs. [1]

The Government is due to consult on the operation of the Institute of Apprenticeships (loA), the new employer-led body due to oversee the management of apprenticeships schemes from next year, throughout 2016. This will include details on how the loA will function and practically oversee apprenticeships.

Lilly believes that this consultation should be seen as an opportunity to influence the Institute to introduce a new Apprenticeships Standard for the high quality training programmes offered by the life sciences industry. In order to bring about a change, however, we need your help to pressure the Government to recognise a need to look again at this issue.

February 2016

[1] Business, Innovation and Skills Select Committee, The Government's Productivity Plan, available via http://www.publications.parliament.uk/pa/cm201516/cmselect/cmbis/466/466.pdf accessed February 2016


Prepared 11th February 2016