Let’s talk: apprenticeships and the levy

For many, a question mark hangs over the impact of apprenticeship reforms and the introduction of an apprenticeship levy to schools, academies and MATs. Joe Crossley, CEO of Qube Learning, an Ofsted grade 2 apprenticeship training provider, explains the positive impact of apprenticeships

Apprenticeship reforms commenced on May 1, 2017 and saw a shift in focus that placed employers firmly in the driving seat of their own apprenticeship training budgets. Large employers with an annual payroll of over £3m started paying a 0.5% apprenticeship levy from April and also registered with the new apprenticeship service, which allows them to manage their budgets and search for training providers.

Smaller employers now make a 10% contribution to apprenticeships whilst the government funds the remaining 90%. Additionally, there is a £1,000 employer incentive for starting an apprentice aged 16 to 18 and micro-employers also benefit from 100% funding for their 16 to 18 year-old apprentices.

However, in the education sector – between schools and academies – it’s not always clear how these apprenticeship reforms can enable business improvements and a return on investment; this is something that we have tried to demystify.

A broader scope

Apprenticeships are for all ages and can be delivered to new entrants to work as well as utilised to develop existing employees. They’re available from levels 2 to 7; level 2 is an entry level, aimed at those new to work or in job roles without management or additional responsibilities, level 3 is for junior management and experenced employees, level 4 is management, level 5 is for senior managers and levels 6 and 7 are degree-level apprenticeships.

From an employer perspective apprentices are beneficial additions to the workplace in many ways, with studies evidencing improved productivity, customer satisfaction, staff and customer loyalty, sales, profitability and reputation. From our own experience, the employers we support report a reduction in staff turnover and improved succession timing.

New heights: the graduate apprenticeship

Degree-level apprenticeships are relatively new but we anticipate much growth in graduate apprenticeships over the coming years. Some of the most effective graduate apprenticeship design happens where there is a collective effort in response to employer demand, with a training provider co-developing teaching resources with a university. For example, we partnered with the business school of the University of Surrey to provide prospective students with a tangible alternative to university – something increasingly popular with students who don’t want to incur a significant amount of debt, preferring to learn valuable practical skills throughout their studies. In addition, the return on investment an employer will see from a degree-level apprentice is significant.

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The apprenticeship levy

Any organisation that is paying the apprenticeship levy, but has not yet chosen a provider, should act quickly. Levy-funds – which enter the employer’s account on a monthly basis – expire after 24 months and are ring-fenced for use on apprenticeship training. If you’ve struggled to identify a training budget in the past, you’ve got one now!

The new style of apprenticeship is much more flexible, too, and many training providers will allow you to embed accredited qualifications and other training modules within the maximum fees chargeable, as set by the Education and Skills Funding Agency. It’s also a perfect time for customers to break away from stale relationships with colleges and providers – if your levy budget is significant you’re eligible to put the request for an apprenticeship provider out to tender on websites such as Contracts Finder. Why not shop around for the best deal?

Unfortunately, many view the levy as a tax, but those who use it effectively, and to their own benefit, view it as an essential addition to their training budgets. The opportunity is there to offer employees opportunities to develop and progress from, for example, intermediate to a degree-level apprenticeship. If spent correctly, the levy can add immense value to any business.

Have you got an apprenticeship strategy in place? We’d love to hear from you. Contact [email protected]

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