The Apprenticeship Levy is failing due to lack of understanding from employers

Written by Dan Rees on 23 April 2018 in Opinion
Opinion

Dan Rees says the Apprenticeship Levy is worth it for businesses to spend time understanding its benefits. 

April 6 marked the first anniversary since the Apprenticeship Levy was introduced in April 2017, and sadly a lot of reports have been negative about the uptake in apprenticeships. Currently, statistics suggest that in the last quarter of the 2017 academic year, the take up of apprentices has declined by 59% in comparison to the period of the previous year. 

The Apprenticeship Levy is actually pretty simple to understand; it puts funding into the hands of the employer as a means to boost economic productivity and to increase the quantity and quality of apprenticeships.

In introducing the Levy, the Government has set a target to achieve 3m apprenticeships by the year 2020, from an estimated £3bn funding raised from the levy in the same period. Prior to the levy being introduced there was an approximate £1.7bn worth of funding allocated from the Department of Education to training providers to deliver apprenticeships.

Since the reforms came into place, there has been little educational marketing targeted at businesses to help their understanding.

The decline in apprenticeship uptake could be due to the following contributing factors:

  • Lack of understanding from employers which is fundamental to current take up levels
  • The Government and training providers duty of care to businesses to make them aware of their obligations and availability of resources
  • Businesses are not aware of the multiple benefits of training and using funding available to them; some have only viewed the levy as an additional financial burden

Since the reforms came into place, there has been little educational marketing targeted at businesses to help their understanding. Employers are unclear of how funds are to be used, the purpose of which they are allocated and whether restrictions apply to certain employees.

According to reports at the end of 2017, the Government is set to review its estimated £140m media buying account to ensure spend is being used as effectively as possible.

In addition, there is a certain perception held around apprenticeships. In the past apprentices were viewed as those leaving full time education for the first time, and traditionally with limited life/work experience. Employers are not aware that following reforms, this is not the case and apprentices are not disadvantaged by age.


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The reforms highlight that apprenticeships are a valuable training route for anyone to upskill themselves regardless of age. In short, businesses can use levy funds for any member of staff, even their CEO.

By paying into the levy account, employers should have a vested interest in their apprentices. They should strive to create worthwhile roles that see individuals grow in their role, so they add real value to the company.

Additional funding will also allow for budgets to be better used by HR teams; any allocations that had previously been set aside for staff training can now be used in other ways within the business. The levy gives employers the opportunity to train existing staff in new areas which will ultimately lead to sustained employment.

The scope and availability of apprenticeships available have also become a lot more widespread and varied. Originally thought of as being predominantly in the manual trade sector, apprenticeships can be found in a range of industry sectors including IT, law, accountancy, media and journalism.

Apprentices are a valuable asset to any company, and increasingly apprenticeships are being recognised as an equal alternative to university. 

In conclusion, the apprenticeship levy is here to stay and businesses should start to recognise the value of the levy. It’s smart businesses and business leaders who will recognise the opportunities the levy presents them and embrace apprenticeships to help grow their business.

 

About the author

Dan Rees is commercial director at YMCA Training.

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