The Apprenticeship Levy - One Year On

April 2017 saw one of the most significant shifts in the provision of apprenticeships our country has ever seen.

The introduction of the apprenticeship levy cemented the government’s ambition to create three million new apprentices by 2020, reviving this valuable route to employment.

One year on, what difference has it made? Well that all depends on who you speak to.

For many businesses, the apprenticeship levy remains a confusing and challenging area to navigate. Sir John Timspon, chairman of high-street chain Timpson, compared it to ‘nothing but a tax’. For many companies though, the introduction of the apprenticeship levy has opened up a world of opportunity. Many staff members previously considered ineligible can now undertake meaningful training, not just new apprentices. Existing staff and employers can become directly involved too.

Alongside my work at Gradvert, I also run a company called Skills Office that provides a complete and affordable business support package, including MIS / E portfolio systems for new training providers and employer providers, which enable them to deliver effective and impact driven training.

One year on from the introduction of the levy, I still talk to lots of businesses that have yet to make good use of the contributions they have made. In many cases businesses have either been poorly advised about how they could use the funds or don’t know where to find a trusted source; someone that can explain things in layman’s terms (without industry terminology) and help them to devise a strategy on how to use the funds towards their overall business objectives.

There are of course many reasons why people have not utilised the funds yet but the most common feedback I receive is that it’s too confusing and whilst many businesses want to do something with it, it’s been put on the back burner.

This is where Gradvert delivers such a fantastic service. They have a solid understanding of how the levy works and we work very closely with companies, on an individual basis, to really understand what it is that they want to achieve from the opportunity, exactly what training and support is required and how the desired impact can be achieved within the remit of the apprenticeship levy.

One area where Gradvert excels, is the investment in a complete 360° degree business analysis, putting the employer’s people strategy at the heart of the process. They strive to achieve their mission to improve business performance through improving people.

They never lose sight of the fact that it’s ‘people who make the difference’ and with such an approach, Gradvert add real value. Gradvert invest in consultants to support organisations to create effective strategies, which in turn leads to businesses making good use of the levy funds and understanding how to gain demonstrable returns on investment in their people.

For those that have taken full advantage of the apprenticeship levy, the impact can be transformational. Levy paying businesses – those with a pay bill of £3m and over – benefit from a £15,000 allowance towards the costs of training, as well as a 10% top up (of their monthly levy contributions) from the government. Non-levy paying businesses can obtain up to 90% funding for their apprenticeship training, so there are clear opportunities for businesses.

It’s clear to see from figures published by DfE (Department of Education) that month on month apprenticeship starts are below expectation; currently more than 22% lower than this time last year. The reasons for which could be debated. However, I believe it’s partly due to many levypaying companies not yet making use of the funds. Businesses should be vigilant as the clock is ticking and funds not used for training within a two-year window will no longer be accessible by the employer. Gradvert have already helped many businesses on the journey towards making the right decisions and are perfectly equipped to support anyone looking for answers.

We, as training providers and consultants within the industry, play an important role in educating the business community about the apprenticeship levy. Established and experienced organisations like Gradvert and Skills Office can advise on issues like compliance, safeguarding and quality assurance, to name but a few. These are all an essential part of the process to be a successful and quality led provider. Ofsted (Office for Standards in Education, Children’s Services and Skills) is really clamping down on training providers, including those who have recently joined the register, who are not fit for purpose. It’s essential businesses work with accredited and experienced providers, with a strong track record, who put the learner first and deliver a quality led provision.

On going changes to the levy, like increasing apprenticeship qualifications to Masters degreelevel, and sharing Levy funds between companies, will make the scheme more attractive to some employers.

It will be interesting to see where we are in another year’s time. I’m confident as more businesses plan their apprenticeship strategy, seek the proper advice and use the levy in the right way, we’ll see an increase in apprenticeship numbers and more examples of employers who have had significant improvements in business functions and performance.