Ahead of the new apprenticeship levy, a leading utilities training specialist is urging industry to embrace the opportunity.
Fears the levy could impact negatively on other areas of training and development by diverting funds from them. Photo credit: PA
From April 2017, all UK employers will be charged a levy of 0.5 per cent on their annual pay bill if it is greater than £3 million. In return for these levy payments, organisations will receive electronic vouchers which can be used to provide apprenticeship training for their employees.
Develop Training Limited (DTL) says companies should conduct strategic reviews of the skills gaps in their current and future workforces so they can set up apprenticeships that will deliver a valuable new generation of workers and meet their obligations under the scheme when it comes into force next spring.
Chris Wood, CEO, said: “The skills crisis won’t be assuaged unless we, as an industry, train more young people. Doing the same level of training but calling it something else won’t improve matters.
“Any new scheme that promotes apprenticeships should be welcomed, but my underlying fear is that the levy is too heavily biased towards meeting Government targets rather than providing a route to meet the commercial needs of the UK’s entrepreneurs and business leaders.”
The aim of the levy is to incentivise businesses to meet the Government’s oft-quoted target of three million additional apprentices by the year 2020.
Wood adds that the new-style apprenticeships ought to be a catalyst for utilities companies to finally tackle talent shortages: “Organisations can make the most of this opportunity by identifying the skills gaps they have now and making predictions about future shortfalls as older workers retire.
“Then they should access funding for apprenticeships via the new digital apprentice service account to address those requirements. That way, they will get real business benefits from the scheme being introduced, rather than going through the motions of training apprentices for the sake of it or simply paying the levy as a tax.”
Wood laments that it has taken Government action to force firms to provide apprenticeships, and he fears many may see dealing with it as a chore rather than an opportunity: “As a result,” he said: “The levy could undermine efforts to improve the quality of apprenticeships, which have fallen out of favour with both employees and employers alike in recent decades.”
Wood also fears the levy could impact negatively on other areas of training and development by diverting funds from them. It has also been suggested some organisations may simply reinvent existing training programmes as apprenticeships to meet their obligations under the levy scheme.
Equally as important as the introduction of strategically important apprenticeships is the need to engage schoolchildren earlier through the better provision of, and access to, informed careers advice.
“Kids need be given a solid, balanced understanding of the post-school options and resulting career opportunities rather than simply being pushed into university degree courses with little employment opportunities after graduation,” said Wood.
“Three million apprenticeships in call centre management, hairdressing or book-keeping may be all well and good for government statistics, and possibly provide a solid career for those involved, but it would fail to adequately tackle the UK’s real skills shortages in engineering, mechanics and other technical subjects critical to our national infrastructure.”