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Apprenticeship Levy an ‘Empty Promise’, Says CIPD
July 24, 2019

The apprenticeship levy is failing to deliver on government promises to boost skills and spending on workplace training, according to research from the CIPD.

The key objectives of the levy were to increase apprenticeship numbers and investment in workplace training, which was in a 20-year decline when the levy was introduced in April 2017.

But the CIPD’s new report, Addressing employer under-investment in training: The case for a broader training levy, described this as an ’empty promise’.

It found that fewer than a third (31%) of the 2,000 levy-paying employers surveyed said the scheme will incentivise them to increase the amount of training they offer, down from 45% in 2017.

The report also showed that nearly six in 10 (58%) levy-paying employers either believe the levy will have no impact on the amount they spend on training (49%), or will actually lead to a reduction in training spend (9%).

Employers have invested in fewer apprenticeships since the levy’s introduction, with starts falling from 509,400 in 2015/16 to 375,800 in 2017/18, the research highlighted.

It also revealed that the way the levy is designed currently is incentivising employers to use their funds in counterproductive ways. A fifth (22%) of employers said they use their levy money on training that would have happened regardless, and 15% said they use the scheme to accredit skills that staff already have. A further 14% reported that the apprenticeship levy directs funds away from other forms of training that are more appropriate for their organisation.

The CIPD is calling on the government to replace the apprenticeship levy with a broader training levy, which would enable organisations to fund both apprenticeships but also other forms of accredited training better suited to their needs.

A portion of the training levy pot could also be used to create a regional skills fund to address skills challenges at a local level, such as by helping smaller non-levy-paying firms invest in skills, the report added.

The CIPD said it also wants the levy to cover all employers with a headcount of 50 or more. This would double the amount raised by the scheme to £5 billion, which would help make up the shortfall from the decline in investment in training over the past two decades, the body said.

Lizzie Crowley, skills adviser at the CIPD, said there is a case for more flexibility around apprenticeships. “Our research clearly shows the apprenticeship levy has failed to deliver what the government said it would: more investment in workplace training. For this to become a reality we need to have a broader training levy that is much less prescriptive and gives employers more flexibility. This should also help to prevent employers from gaming the system, as is currently the case,” she said.

Crowley outlined the case for obliging a larger pool of employers to invest in the levy:

“With only 2% of employers required to pay the apprenticeship levy, the money raised from it was never going to be enough to close the gap that’s been left by the long-term decline in training investment. But if we had more employers contributing we could make up the shortfall and also help to boost regional investment in skills.”

10 Key Facts the DfE Want Us To Know About The Apprenticeship #Levy
April 8, 2019

The following was published by the Department for Education on 5th April 2019

The apprenticeship levy is celebrating its two year anniversary. Here’s what you should know.

Two years ago, we introduced the apprenticeship levy to create long term sustainable funding for apprenticeships and to give employers more control to provide their staff with a range of training opportunities.

The levy means there is more money available than ever before for apprenticeship training and allows employers to choose which apprenticeships they offer, how many and when. By 2019-20 the funding available for investment in apprenticeships in England will have risen to over £2.5 billion, double what was spent in 2010-11 in cash terms. Read more

ViewPoint: The Apprenticeship Levy – If Rationing is to be Introduced, Let’s Get it Right
April 5, 2019

There has been recent scrutiny about the forecasted overspend of the levy. UVAC has been predicting this for some time and now the Institute (IfATE) and the National Audit Office have confirmed this is an issue writes Mandy Crawford-Lee, Director of Policy and Operations, University Vocational Awards Council (UVAC).

We are now in a situation where ‘proposals’ for a way forward are being put forward, so here is a view from the perspective of an organisation that wants the levy to be used to raise productivity, enhance social mobility and support the delivery of high-quality public services.

Bizarre Proposals: We’ve had some fairly curious proposals on how to manage such an overspend.

AELP has called for an end to using the levy to fund level 6 and 7 and degree apprenticeships.

So as UVAC has said on many occasions, it is the case that AELP wants to stop police forces using their levy payments to fund the police constable degree apprenticeship to train new police officers and prevent the NHS from training new nurses through a degree apprenticeship. Read more

Ofsted’s New Provider Monitoring Visits
January 18, 2019

Chris Jones, HMI, Specialist Adviser for Apprenticeships, on Ofsted’s new provider monitoring visits (8th January 2019)

Since April 2017, any provider wishing to train apprentices must be included on the register of apprenticeship training providers. We inspect all providers that receive apprenticeship funding from the Education & Skills Funding Agency or through the apprenticeship levy and that deliver apprenticeships at levels 2 to 5. A number of these providers are now eligible for inspection for the first time.

We usually inspect a new provider within 3 years of it beginning to deliver education and training programmes. But, because of the large volume of these new apprenticeship training providers and the potential risk to quality, Her Majesty’s Chief Inspector, Amanda Spielman, announced in November 2017 that inspectors would carry out early monitoring visits to a sample of new apprenticeship providers. The Department for Education (DfE) has since provided additional funding to make sure that we have the resources to carry out monitoring visits to all these providers.

We will now be carrying out a monitoring visit to all newly funded apprenticeship training providers that have been delivering level 2 to 5 apprenticeships since April 2017. This visit will normally be within 24 months of their starting to deliver funded training. They will then have a full inspection normally within 24 months from when we publish their monitoring visit report.

By the end of November 2018, we had published more than 90 reports from monitoring visits to new providers.

Themes that inspectors look at

Monitoring visits for new providers are different to full and short inspections. They normally take place over 2 days. Inspectors do not cover all aspects of the inspection framework. Inspectors make progress judgements on 3 themes: Read more

ViewPoint: The Apprenticeship Levy, One Year Later by Jill Whittaker
July 26, 2018

The government initiative to fund three million apprentice places by 2020 has had a mixed response, but, as Jill Whittaker, MD at HIT Training says, the funds are there for the taking and businesses are already seeing results.

For some hospitality businesses, the perceived admin involved with the government’s apprenticeship levy may have felt a little overwhelming. It’s perhaps hardly surprising that, according to a report by the Open University, £1.3b of the cash paid into the fund is yet to be claimed.Viewpoint: the apprenticeship levy, one year later

But this figure is less dramatic than it first appears; with businesses having 24 months to use levy payments, they may just be taking time to understand the scheme first. This is our experience at HIT Training. In the hospitality sector, May 2017 saw apprenticeship starts at just 25% of the same month in 2016. But by the end of 2017, that figure had increased to 80% year on year. Far from writing a scheme off in its infancy, we need time to allow new complicated legislation to bed down.

As a reminder, the levy itself requires all companies with a pay bill of more than £3m to contribute 0.5% of their payroll costs to the scheme, which they then claim back for training. This amount is then topped up by 10% from the government. Businesses with pay bills below £3m don’t pay into the fund but they still have access to government subsidies of 90% of the cost of the apprenticeship, with the employers co-paying the additional 10%.

A recent survey from People 1st showed nearly two-thirds of employers in the hospitality, travel, tourism and aviation sectors are either confident or very confident they will see a return on investment from their levy contribution. Better staff retention rates, improved skills and personal development have all been highlighted as benefits by nearly three-quarters (72%) of respondents.
Read more

Greater Flexibility for Apprenticeship Levy as Transfers Extended
June 28, 2018

Employers given green light to transfer up to 10% of levy funds to multiple businesses the Department for Employment reports.

Large employers will soon be able to transfer up to 10% of their apprenticeship levy funds to multiple businesses, helping to boost the number of high-quality apprenticeships across the country.

Apprenticeships and Skills Minister Anne Milton announced the move on 26th June at an event attended by over 160 top businesses to celebrate apprenticeships and the significant contribution they are making to their businesses and the wider economy.

The apprenticeship levy is giving employers a real opportunity to invest in high-quality training, helping to grow their business and get the skilled workforce they need to thrive and succeed. Only around 2% of employers pay the levy but that investment has funded more than 40% of the apprenticeships started in the last year.

Currently, levy-paying employers can transfer up to 10% of their apprenticeship service funds to one other employer. After listening to businesses, the Minister’s announcement today goes further and provides even greater flexibility for businesses so that from July, employers will be able to make transfers of up to 10% to as many other employers as they choose.

This move will lead to more quality apprenticeships being created and will help employers to work together in partnership, supporting them to take on apprentices who may not have done so otherwise.

Apprenticeships and Skills Minister Anne Milton said: Read more

Open Letter Before Apprenticeship Figures Announced
June 14, 2018

An open letter signed by skills minister Anne Milton, Institute for Apprenticeships boss Sir Gerry Berragan and dozens of senior figures from business schools, businesses and other organisations wants the sector to “support employers in making use of the levy”.

A spokesperson for the Department for Education said the letter had been intended as a defence of the apprenticeship levy following recent criticism, including from the Confederation of British Industry and the manufacturers’ organisation EEF.

“We believe that the apprenticeship levy gives employers a real opportunity to invest in training, bringing the well-recognised enthusiasm and new ideas of apprentices to their business,” the letter said.

University should not be “viewed as the only route to a successful career”.

“That’s why we should support employers in making use of the levy, and in providing opportunities for people to learn, earn, and get on in life,” it concluded.

Read more

Taking Stock of the Apprenticeship Levy
May 18, 2018

The following article by Rob Gray first appeared in HR Magazine on May 1st, 2018. In it, he explores the apprenticeship levy’s teething problems a year in, and where employers would like to see changes

‘A nation flourishes when it realises the full potential of all of its people.’

Thus, rather grandly, begins the second paragraph of the government’s policy document English Apprenticeships: Our 2020 Vision, published after the chancellor’s announcement in July 2015 that an employer levy would be introduced to fund apprenticeships.

The ensuing text made the point that around the world apprenticeships have long been seen as a crucial way to develop the skills wanted by employers. To address the pressing skills gap, the government pledged to increase the quality and quantity of apprenticeships in England, laying out the bold objective of reaching three million starts by 2020.

At the centre of reforms was the introduction of the apprenticeship levy on 6 April 2017. Employers with an annual payroll of more than £3 million are required to pay 0.5% of their annual wage bill into an apprenticeship service account run by HMRC to pay for apprenticeship training and assessment. The government automatically adds a 10% top-up to funds, although any unused funds expire 24 months after entering an account.

But while the intention behind the overhaul is laudable, the outcomes have so far fallen short of the aspirations. A year after implementation of the levy, debate rages as to its effectiveness and opinion remains divided.

CIPD research released in January 2018 found almost a fifth (19%) of levy-paying firms don’t plan to use it at all to develop apprenticeships and will simply write it off as a tax. Moreover, many firms are re-badging existing training in an effort to claw back the levy they pay.

The upshot of this is that in many instances, instead of bringing additional value, the new system is creating burdensome bureaucracy and cost. And when the Department for Education released figures in January 2018 showing a decline in apprenticeships it elicited a scathing response from manufacturers’ organisation EEF, which asserted this was clear proof that the levy and wider reforms weren’t working and that a radical rethink was required.

So how do employers feel about the levy a year in? Do they see it as a success, failure or somewhere in-between? A work in progress or something that should be scrapped?

“The apprenticeship levy is quite a departure from previous types of learning grants,” says Rebecca Buck, outgoing head of HR at the Press Association (PA). “Both employers and approved training providers still have a lot of rules to get to grips with. Looking back, I don’t think anyone was fully prepared for the change in April 2017 and there is a significant gap in understanding.”

Read more

EEF Research Report
May 10, 2018

According to a survey by EEF, 95% of manufacturers want the apprenticeship levy changed in some form, with a quarter want the levy to turn into a training levy.

“Two-fifths of companies say colleges and training providers are either unable or unwilling to deliver the Apprenticeships that manufacturers want”.

EEF’s report – A Levy Price to Pay? explores the impact that the Apprenticeship Levy has had on manufacturers. It finds that manufacturers have not been able to afford to stop training apprentices as they are vital to their business, but that the Levy itself hasn’t spurred on further investment in, or recruitment of, apprentices. In fact, in some cases plans to offer apprenticeships have been scaled back.

It finds that just 7% of manufacturers have faced no challenges with the Levy. With the majority facing challenges in finding quality providers, relevant standards and meeting the various funding rule requirements. It is not a surprise then that manufacturers want to see change.

Read more

Make the Most Out of the Levy
April 12, 2018

The following blog was published on the ERSA website on 9th April 2018.

With the first anniversary of the Levy fast approaching, 2018 has already started to see a huge change in the market and it’s a great time for businesses to think seriously about their options and how best to use this to their advantage.

Levy funds can be used for anything from new apprenticeship starters to up-skilling current employees, and any unspent funds are returned to the treasury after 24 months, which is why the deadline is an opportunity for business leaders to take advantage while they can.

At Seetec, we’re now seeing the highest level of Levy starts so far this year. The impending deadline coupled with strong, strategic planning has boosted employee communications and engagement. Losing out financially has meant that Levy numbers have increased and we anticipate that the second quarter will be our busiest for starts ever.

For British businesses, there is the chance to up skill workforces and deliver real returns by taking advantage of the Levy, and it’s great to see people moving up the career ladder and in turn creating new opportunities for others. But leaders looking to get on board will have to think seriously about the next steps towards progression and do their research, as the upcoming quarter is a critical time for the Levy.

The introduction of complicated new rules and lack of preparation and consideration have created the perfect storm which has had a massive impact on the sector. There is still a lot of change ahead and the market, and its supply base, will continue to evolve over the coming months,  but 2018 should see new jobs, reduced skills gaps and developing workforces that can only help our British businesses thrive. Read more