Chris Wood explains why updated plans for the apprenticeship levy are positive news for disadvantaged young people and employers.
We welcome last week’s news that the government will provide an extra 20 per cent of funding to train 16- to 18-year-olds and increased funds for apprentices in the poorest parts of England, as well as for under 24-year-olds who are in care or who have special educational needs.
This is great news for the UK, as it will provide opportunities for employers to train people of all ages and backgrounds via the levy, resulting in a highly skilled next generation of workers as well as helping to combat youth unemployment and set right the balance of opportunities across the country.
It is expected that, from April 2017, all UK employers will be charged a levy of 0.5 per cent on their annual pay bill if this 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. 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.
So what does this mean for the utilities sector? After all, apprenticeships have been around for generations. In recent decades, however, they have been neglected and appear to have fallen out of favour with both employees and employers alike. As a result a dearth of apprenticeships has led to a clear skills gap, exacerbated more recently by an older, and more appropriately trained, generation reaching retirement.
Nevertheless there is hope! The recent introduction of Trailblazer apprenticeships, for example, provides some optimism that businesses will be encouraged to invest for the future in members of the current generation which are leaving schools and colleges and entering the workforce.
An underlying fear, though, is that the apprenticeship levy scheme is too heavily biased towards meeting Government targets rather than providing a route to meet commercial needs of the UK’s entrepreneurs and business leaders. 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.
More fundamental change is needed. Schoolchildren need, for example, better provision of, and access to, informed careers advice and an understanding of the post-school options, rather than simply being pushed into sometimes arguably valueless university degree courses with little employment opportunities after graduation.
The crux of this is to provide valuable, real-world careers advice, through which a genuine interest in industry can be generated. If successful, industry role models might be discovered or created along the way, which would provide the basis of a virtuous cycle of reinforcement. Bringing employers directly into schools is a very good way to do this.
One organisation leading the way with this approach is Founders4Schools, which aims to improve the life chances of schoolchildren and students by giving them access to inspiring business leaders in their community. My organisation is proud to be working with Founders4Schools as a part of our Industry Skills Forum, which brings together leaders from the utility sector to develop ideas and initiatives around recruitment, training and development.
Naturally, any new scheme which promotes apprenticeships should be welcomed but, ultimately, businesses must take responsibility for their own future and ensure there is a suitably trained next generation of workers to ensure their survival and provide the services that the UK requires.
They can start by getting ready to do more than simply meeting their responsibilities under the apprenticeship levy. April 2017 is fast approaching, so employers need to start preparing now.”