Friday, 12 August 2016 12:13

Latest announcements surrounding the Apprenticeship Levy and accompanying consultation on the funding proposals.

Habia brings you further details on the latest announcements surrounding the Apprenticeship Levy and accompanying consultation on the funding proposals.

The Government must address an "endemically low level of apprenticeship adoption by employers", a new report has warned, finding that the target of creating 3 million apprenticeships by 2020 will be "unattainable" unless drastic action is taken to make the programme more appealing to employers.

The research by policy consultancy SQW concludes that current reforms, including the creation of a new Institute for Apprenticeships and Technical Education and the introduction of the apprenticeship levy are unlikely to address the reasons for the low take-up by employers.

The warning comes ahead of the expected publication of new guidance on how the levy will operate.

Concerns raised in the report appear to be supported by the latest official statistics, published last month, which revealed that the number of apprenticeship starts in the third quarter of 2015/16 was 112,900. This was almost 2,000 fewer than in the same period a year earlier and 37,000 fewer than the average needed over the next five years for the government to hit its much-vaunted target.

In the report, David Crichton-Miller, chief executive of SQW Group, argues that the apprenticeship system "will remain insufficiently appealing to small businesses, who are crucial to England reaching its apprenticeship targets, and that the target will therefore remain unattainable on this trajectory".

In an exclusive interview with TES, Robert Halfon, the new apprenticeships and skills minister, described the successful introduction of the levy in April 2017 as the "single most important" aspect of his new role.

But senior figures across the sector also expressed concerns. Paul Warner, policy director at the Association of Employment and Learning Providers (AELP), said he shared SQW's concerns about replacing apprenticeship frameworks with new standards at the same time as implementing other changes to the programme. He was also concerned about the need to keep smaller businesses engaged. "AELP has written to the new ministerial team calling for a pause on the standards process and continued growth under existing frameworks to hit the 3 million target," he said.

'A toxic mix'

Matt Garvey, managing director of West Berkshire Training Consortium, said that a "drip-feed" of information about how the levy will operate had adversely affected confidence and momentum behind the apprenticeship programme.

"If you add in the ambiguity around funding rules and ignorance of what an apprentice costs, there is a toxic mix that is not going to help [increase apprentice numbers]," Mr Garvey said.

Lindsay McCurdy, chief executive of training consultancy Apprenticeships4England, said she was confident that the target of 3 million apprenticeship starts will be reached but that most of them would be people who are already employed, without any job progression. "Is the government number-driven or does it want to give businesses the apprenticeships they want, and of the quality and standard required?" she added.

A separate report published by the Federation of Small Businesses concluded that, with appropriate government support and incentives, the small business sector in England has the potential to double the number of apprentices it hires to more than 2 million.

Key proposals outlined include plans to:

  • Support all employers to offer high-quality apprenticeships. Employers too small to contribute to the apprenticeship levy would have 90% of the cost of apprenticeship training paid, ensuring employers of all sizes can develop the next generation of skilled workers.
  • Provide extra funding for young apprentices and care leavers. The government will pay an additional £2,000 to help 16 to 18 year olds, young care leavers and young people with an education, health and care (EHC) plan to make their first step into the world of work, with £1,000 going to employers and an additional £1,000 to training providers. Furthermore, employers with fewer than 50 employees will not have to pay anything towards the cost of training staff in these groups.
  • Offer more flexibility for employers to retrain individuals. Employers will be able to use levy funds to retrain workers in new skills, even if they have prior qualifications, provided the apprenticeship is significantly different from their previous qualifications gained.
  • Support employers taking on more apprentices. Levy-paying employers (those with a pay bill of more than £3 million that want to spend more on training than is in their digital account) will benefit from government support, with 90% of their additional apprenticeship training costs being funded so they can continue to recruit and retrain highly skilled employees.
  • Give employers more control and access to better-quality training. Employers will have the power to determine exactly what training their apprentices receive and what provider they receive it from. A new register of training providers will be introduced from April 2017 to improve the link between training providers and employers, helping employers to identify high-quality providers so they can deliver the skills they need to grow.

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Article updated 06 September 2016