The Apprenticeship Levy can be a success but the Government needs to make some changes, says Kirstie Donnelly.
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The UK is at a pivotal moment in the history of its skills development – the impact of which will shape the future of work and the country’s economic prosperity for decades to come.
As Brexit uncertainty continues to dominate the news agenda, many questions remain over how the country will continue to compete on the global stage. But perhaps none more so than what we will do if and when access to skilled labour is restricted.
Factor in a rapidly evolving workplace and workforce demographic, and there has never been more of a need to invest in home-growing the skills that we may no longer be able to import from abroad.
The answer lies in apprenticeships
So how can we do this? We can start by supporting better investment in the country’s apprenticeship system – one of the main reasons why the Apprenticeship Levy was introduced by the Government back in 2017.
The rigidity of the current system is holding many back from making the most of the levy and limiting the potential it has for improving business conditions.
Just two years on, apprentice numbers are falling every month and employers’ frustrations are increasing. It’s fair to say that the levy isn’t doing the job it was brought in to do.
And while the results highlight that employers do still value apprenticeships as a core part of their recruitment and development strategies, the rigidity of the current system is holding many back from making the most of the levy and limiting the potential it has for improving business conditions.
In light of the fall in take up of new apprenticeships in 2018, the Government must remove the barriers that prevent businesses from making full use of apprenticeships as the vital skills solution they are designed and intended to be.
More clarity is needed
As a first step, it is undeniable that more clarity is needed. The Government must be clearer on the amount of levy that has been spent so far and the amount that employers will be left with once their initial two-year investment has run out at the end of March 2019.
95% of employers failed to spend the entirety of their apprenticeship budget in the first 12 months of the new system. What’s more, they also said that they only expect to spend an average of 56% of their allotted funds annually in the future. This begs the question: What is happening to the money that is left over and what exactly are the levy funds being spent on?
Without transparent reporting on the amount of money that is being spent, industry bodies, training providers and – especially – employers are left in the dark about the true extent to which businesses have taken up apprenticeships and how well the system is working.
For the apprenticeship system to be engaging and harnessed to its full potential it needs to be clear and understandable.
There’s no ‘one-size-fits-all’ solution for apprenticeships
In addition to clarity, research has found that flexibility is one of the key things lacking in the current system. A staggering 92% of employers want greater flexibility in how they are able to spend the levy, with many calling for more support with apprenticeship delivery and vital workplace training.
It is of critical importance that Government listen to these calls from employers. At a time when investment in skills development is so desperately needed, we need to open up access and ensure a far greater number of employers are able to use these funds as they are intended.
The Government needs to make better use of data to understand apprenticeship trends across company sectors and sizes. There’s no ‘one-size-fits-all’ solution for apprenticeships and as a result the Government must consider adopting a flexible approach so different industries can use the levy to support their individual skills challenges and needs.
Creating parity of esteem
93% of employers have experienced some form of blocker to investing in apprenticeships, with one in five respondents saying they are specifically blocked by a lack of information and support.
The Government needs to work with employers and training providers to broaden the appeal of apprenticeships, through promoting the benefits to parents, students and teachers, and investing more time in outreach with local schools and colleges.
This would include putting clearer progression pathways in place to allow would-be apprentices to understand the longer-term career progression opportunities from undertaking an apprenticeship, with the ultimate goal of creating parity of esteem between vocational and traditional higher education.
A world class skills system for post-Brexit Britain
With only a matter of weeks to go until the deadline for leaving the European Union, there are still many question marks surrounding the status of business conditions in Britain after 29 March.
Brexit may become the biggest upheaval to the availability of a skilled and talented workforce for a generation, which means it’s critical for Britain to have an apprenticeship system that works for all who invest in and benefit from it.
That’s why the Government must remove the barriers currently holding back employers from investing in apprenticeships.
Only then can we create the skilled and productive workforce we so desperately need in these rapidly changing times – and only then can we create a world-class skills system that is capable of supporting Britain whatever political and economic changes the next few weeks and months may bring.
About the author
Kirstie Donnelly MBE is managing director at City & Guilds Group