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Employers urged to plan after major Apprenticeship Levy update

Employers urged to plan after major Apprenticeship Levy update

Mixed feedback from British industry has begun to emerge following the Government’s announcement on Tuesday about how it plans to fund apprenticeships and make the levy work in practice.

Ben Rowland, key account director at Arch Apprentices, said it was a “great opportunity” for businesses to look out how they can provide more support and training to skill up their existing and new staff: “The big change is the additional time employers have – 24 months instead of 18 months to use the vouchers. This makes a big difference as now employers have more time to manage their apprenticeship planning.


“Companies have a real opportunity to look at how they can match their current training to Apprenticeship Levy-approved standards while, most importantly, also considering their skills gap.”


Funding transfer flexibility

The Federation of Master Builders (FMB) broadly welcomed the ability for larger companies to transfer unspent apprenticeship funding to smaller firms.

Brian Berry, chief executive of the FMB, said: “Ensuring that there is plenty of flexibility within the digital voucher model is critical to the Apprenticeship Levy’s success. This is especially true for the construction sector as two thirds of all construction apprentices are trained by SMEs. As long as larger contractors are unable, or unwilling, to play a greater role in industry training, then it’s vital that funds can be rerouted to smaller firms.

“The severity of our industry’s skills shortage means that we need to ensure that every single penny of Apprenticeship Levy that is extracted from the construction sector is reinvested in high quality construction apprenticeships. We had some concerns that if larger companies were not able to pass their vouchers onto smaller firms, the money would be left languishing in the general pot before eventually being spent by other sectors. Now it’s a question of ensuring that the digital voucher model is simple and easy for small firms to navigate.”

The government vowed to deliver more flexibility for employers by giving companies 24 months to spend funds in their digital account, up from 18 months.

‘Steps forward’

Meanwhile, Verity O’Keefe, a senior employment and skills policy adviser at EEF, the manufacturers’ organisation, said there had been “significant steps forward”.

“The Government has acknowledged that delivering high quality apprenticeship training in our sector costs more,” says O’Keefe. “It also benefits non-levy payers. Many of our members say they pay over and above the current public funding for engineering apprenticeships. Having more funding available means that manufacturers should not have to pay an added premium to get the training their businesses need.”

The new Apprenticeship Levy, to be introduced in April 2017, will be set at 0.5% of a company’s pay bill and only employers with one over £3m will have to ‘pay’ it.

Yet despite the initial enthusiasm from industry, others were somewhat more tentative in their response.

Mark Dawe, CEO of the Association of Employment and Learning Providers (AELP), the UK trade body for vocational learning and employment providers, said: “The AELP is pleased that the government were true to their word and treated the apprenticeship consultation as just that – a consultation.

“While there are clearly still areas of concern, significant steps have been taken to respond to the key matters raised by AELP and its members and we welcome that.”

He praised the reinstatement of deprivation funding as “a great relief for those supporting the hardest to reach learners” but stressed that while the AELP welcome the £600 set amount as a “good first step”, because it applies to frameworks only, it “may not be enough”.

“The government has promised to keep this under review and we look forward to working with it on securing the outcome that will work best for these learners and maintain the level of support seen previously for those greatest in need.”

Dawe said his members still have concerns about the negotiation of price, and “auctioning apprentices to the lowest bidder” putting at risk one of the skills minister’s core aims of ensuring all apprenticeships are high quality.

However, the AELP stressed that without any underwriting of funding, non-levy payers will be “forced to pick up the scraps” from levy payers.

“We have said that placing these smaller companies in a lower league of priority for apprenticeship delivery, even though they have been the core of delivery to date, provide accessibility across the country, would be disastrous for social mobility and productivity.  We would therefore like to see the details of the non-levy budget and hope that it is maintained at current estimated levels.”

 Article Courtesy of Apprentice Eye (www.apprenticeeye.co.uk)




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