Businesses gearing up for Apprenticeship Levy challenges and opportunities

Business leaders from central Lancashire came together at Brockholes Conference Centre to share ideas and best practice in advance of the government’s flagship training programme, the Apprenticeship Levy.

The Apprenticeship Levy, due to be introduced in April 2017, will usher in big changes to the way training and apprenticeships are funded.

More than 70 representatives of companies from all sectors, along with education and training providers, gathered for the second in a trio of advice events planned across county.

They have been organised by Lancashire Business View in partnership with the Lancashire Work Based Learning Executive Forum, the Lancashire Enterprise Partnership and The Lancashire Colleges, to help businesses understand what it means for them.

Sian Owen of education management specialists Pearsons set the scene for delegates which was followed by a lively debate with a panel of experts from industry and training, chaired by Lancashire Business View publisher Richard Slater.

The audience heard the levy will affect businesses with a payroll in excess of £3m, the equivalent of  around 150 employees and these businesses will pay 0.5 per cent of their payroll costs to the HMRC on a monthly basis, after an initial £15,000 allowance.

The government will then top up the funds by 10 per cent, which means more employers will be able to get more out the levy than they put in.

What the panel said:

Paul Holme, Lancashire Enterprise Partnership

"We currently have skills shortages which are only going to get worse in the future both because of economic growth, priorities, industrial strategies and industrial development.

Alongside this we have an aging work force in many key sectors of our economy who are about to reach retirement so we need to bring new workers in to replace these skills.

None of us yet know the implications of Brexit which also causes a potential for future skills shortages.

Therefore a benefit of the Apprenticeship Levy is it will encourage and support the investment of skills we actually need whether for future employees or up skilling of existing employees.

The initial challenge lies within late systems and late development of policy which is a challenge in getting things up and ready for early next year.

It is also important that government don’t become overly focused on the target they have set in the Conservative manifesto of 3 million apprenticeship starts and instead making sure that the support training providers offer is for  the skills employers actually need for the future and to drive the economy forward - and not simply because we have an Apprenticeship Levy."

Lisa Bloomfield, Lancashire Work Based Learning Executive Forum 

"The Apprenticeship Levy is enabling organisations to get involved with the apprenticeship brand. Apprenticeships really are a great thing to become involved with and known to work not only for the recruitment of new staff but also for the up-skilling and re-training of existing staff.

There are so many different sectors and levels available and opportunities for employers to create their own standards if they don’t currently exist enabling you to meet the particular roles you have within your organisation.

It’s time to flip this around and rather than thinking of the challenges brought by cost to instead think of it as a new work force development budget and learn how as an organisation you can maximise and get the most out of this."

Martin Shackleton, Lancashire Care NHS Foundation Trust

"With nearly 10,000 employees the Apprenticeship Levy is costly for our company.

The main challenges are overcoming the perceptions. There’s the perception that this is a stealth tax brought in by the government in order to fund training, which isn’t necessarily a bad thing.  There’s a perception that apprenticeships are 16 and 17 year olds coming out of colleges when in fact our current oldest apprentice is approaching his 75^th birthday.

There is also the perception that this is being forced upon us and to a degree it is as we can’t opt of it and therefore have to participate.

However, while it is a lot of money it’s an opportunity for investment in the total workforce. It is beneficial to every member of the workforce without pay grade limitations enabling employees to progress their careers.

A huge example of how to reap the maximum benefits is to look at the health service which is often known in the media to be struggling and making financial cutbacks. Training is something that is hard in times of financial difficulty and we have here a huge pot of money which cannot be used for anything other than training.

So it is a real opportunity to take this forward and invest in our staff and make sure we have the workforce we need for the future."

Gemma  Kennedy, WEC Group

"At WEC we are well known for having a good apprentice academy, taking on 20-plus apprentices every year, so for us we see this as an extra tax element. We are however going to gain a little extra visibility over the training that is going to be offered. At the moment the funding and training is all provided through the colleges, but with the Apprenticeship Levy we are now going to have more say and involvement.

A big challenge is going to be the extra administration we are going to take on with the Levy; managing the payments, sorting the agreements out, the daily and monthly administration.

All the funding that was done through the college we now have to take on ourselves and this is a lot of extra work. Another challenge for us personally is the competition we will now have from other companies offering apprenticeships."

Howard Deighton, Alstom Transport UK

"We have about 3,500 employees so that’s about half a million of investment - or a bill.

You can say it’s been forced upon us because it has, but it’s here now so we need to see where can reap the benefits.

The learning and development team are over the moon because they now have a massive pot of money they can invest in training.

It’s made us realise we have to invest in apprenticeships more to try and access some of that money back. That has driven us to consider building a training academy and becoming an employer provider for our own apprenticeships."

Businesses which employ 150 or more can register to attend the final Apprenticeship Levy event by clicking below: West Lancashire, October 26, Ribby Hall Village