Will apprenticeships fall victim to the unintended consequences of the levy?

As the apprenticeship levy comes into force next year, Don Taylor discusses the potential consequences.


The apprenticeship levy will apply to all employers operating in the UK with a pay bill over £3 million each year. Photo credit
During the time of the Raj, the British were worried about the number of cobras in Delhi. The government decided to control them by offering a bounty for each dead snake presented to the authorities. British were worried about the number of cobras in Delhi. So the government decided to offer a bounty for each dead snake presented to the authorities. Large numbers of dead cobras were duly brought to the Civil Service, who paid up. 
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With time, the snake population dwindled, and so did the payments. In response, enterprising locals began breeding and slaying the snakes as a reliable source of income. When the authorities became of aware of this, they cancelled the programme. 
The now worthless captive snakes were released, and the cobra population soared to greater heights than ever.
Good ideas too often founder on this law of unintended consequences. Not always, but often enough that law-makers should temper their grand ideals with a clear perspective on human nature.
In workplace learning, the most egregious recent waste of taxpayers’ money was the Individual Learning Account (ILA), which offered individuals £150 to spend on training of their choice. Launched in September 2000, the scheme was abandoned just over a year later.
The ideas of the ILA were sound. The money would get people back into learning and the best training providers would flourish. But, rushed to launch and inadequately managed, the scheme was a godsend to the unscrupulous.
They could sign up learners and, with a little fancy footwork on the forms, claim the £150 per person without needing to bother with any training. The result: up to £97 million wasted in fraud.
Nobody is suggesting that the current government’s training levy, due to come into effect in April 2017, will suffer similar criminality. Almost certainly, however, it will be subject to the law of unintended consequences.
The most likely immediate effect will be substitution – employers and providers will find ways to re-badge existing training schemes as apprenticeships. The levy then becomes a government subsidy for existing corporate training, neither encouraging apprenticeships nor boosting the UK’s overall effort in workplace development.
This is one reason CBI chief Carolyn Fairbairn has asked the government to rethink its plans, which, she says, are rushed and poorly thought through.
In addition, a levy almost always promotes one mode of training delivery at the expense of another. Until recently, France’s training levy was reclaimed entirely via classroom training. This led to a proliferation of mediocre classroom suppliers. Their role: to reclaim for employers what they had paid out in the levy, regardless of whether the training was actually effective. 
As with the cobras of the Raj, once money enters the room, predictability leaves and unintended consequences are almost inevitable. Let us hope that the new levy is an exception. 
About the author
Donald H Taylor is a 25-year veteran of the learning, skills and human capital industries. Follow him on Twitter @DonaldHTaylor​


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