The Apprenticeship Levy one year on, is it really all that bad!?
As I scrolled through the Google search page for statistics to gather for this article, the resounding theme was of negativity. Articles forecasting ‘Apprenticeship Levy is at breaking point’ and ‘Employers say Apprenticeship Levy not working’.. this all seems a little dramatic to me!
The Government’s promise of 3 million new apprentices by 2020 was inevitably going to mean a funding dilemma. To plug the gap the Government decided to introduce the apprenticeship levy, which came into effect from 6 April 2017. In basic terms, employers with a wage bill of over £3 million have to make 0.5% contribution into a digital account, (what we call the mythical ‘levy pot’) which can only be spent on training apprentices. If, after a set period this tax hasn’t been spent, it affectively goes back into the system – a use or lose it approach.
Further delving into these articles saw reasons for this failure cited as ‘employers struggling to understand how the system works’, ‘complaints about it being too bureaucratic and inflexible’ and accusations that ‘it launched without the mechanisms needed to function effectively, suggesting it has actually put off companies taking on apprentices!’ - In some respects, complaints can be seen to be justified - There were 114,000 apprenticeship starts reported in first quarter of the 2017-18 academic year. That compared with 155,600 for the same period in the previous academic year.
Despite this, I would argue that the apprenticeship levy has refocused the business economy on the issue of apprenticeships and encouraged bigger businesses to take on more of a social responsibly to employ and train the younger generation. This not only benefits the local communities they operate in but also enables succession planning for the future of their business. As a local apprenticeship provider, Starting Off have seen an increase in engagement from companies that are levy employers; we currently have 75 learners across 45 companies. With such a fundamental change to the Apprenticeship system there are bound to be different views as to how the system should be implemented, but in our experience the vast majority support the principle of establishing a national system for developing the skills we will require to drive productivity. And in relation to the figures, there are still a large number of companies that are non-levy employers of apprenticeships that will have contributed to these statistics- their decline in engagement will be for reasons completely separate to the levy – Brexit to state just one!
Equally with anything new, as the Minister for Apprenticeships and Skills Anne Milton said: “The last year has been a period of significant change. It will take time for employers to adjust. But we must not lose sight of why we introduced our reforms in the first place - to put quality at the heart of this programme and putting control in the hands of employers.”
In essence, this really is a fantastic opportunity for levy employers to shape their workforces of the future. One of Starting Off’s levy clients has commented;
“At Infinis, we have long since been passionate about apprentices, and their development. Starting Off have been a great help since the introduction of the Levy. They have found us 3 high quality apprentices, each proving a real fit with the business. They have also supported us as we (jointly) progress through the minefield of the new statutory process. I would have no doubt in recommending Starting Off as an apprentice partner to any prospective employers in the Northamptonshire area.”
At Starting Off we are able to offer a consultative/ partnership approach which includes levy set up, recruitment and then training - taking the hassle out of the levy process for our clients has meant we have had a much more positive experience. Its not just us, National training provider 3aaa are also seeing the benefits and comment . “Due to the levy we are now offering apprenticeships in construction, data analyst and customer service. The levy has been a wonderful thing for young people as it has provided more opportunities within Northamptonshire and more diverse job roles.”
Like it or loath it, for now at least the apprenticeship levy is here to stay so my advice would be, embrace it and let’s stop looking for reasons why its wrong and start looking forward at all the reasons it’s right.