The apprenticeships and skills guide

Three years ago, the government introduced a levy scheme designed to encourage employers to invest in apprenticeships. It has not gone well. 

A poll conducted by Grant Thornton at the close of 2019 found that less than half of the businesses included in the scheme had spent any of the money they had paid into their pot (early funds have now expired and been lost) and virtually none of those questioned understood why they had been forced to pay at all, or what the potential benefits would be.

Speaking to apprenticeship and training providers across Lancashire, however, we found evidence that the message is beginning to percolate, uptake is on the increase and upcoming improvements to the way apprenticeships are delivered should see adoption rates climb, to the benefit of the county as a whole.

The apprenticeship levy works by automatically collecting funds into an account, which is topped up by the government, and can then be used to train or recruit apprentices through approved training providers.

Zoe Dyson, the Lancashire based national accounts director at Intequal, explained: “The funding system for apprenticeships was revised in April 2017, requiring all UK employers with a pay bill of over £3m per year to invest 0.5% of the value of their pay bill, minus an apprenticeship levy allowance of £15,000 per financial year, into their apprenticeship service account. 

Individuals, employers and the local economy all benefit from the skills uplift that comes with apprenticeship training

“The contributions are automatically taken from the company’s PAYE scheme and added to its apprenticeship service account. The government then applies a 10% top-up to the funds available, and employers can put this money towards apprenticeship training within the company.”

But as the Grant Thornton survey found, the funds are being left unspent. A huge waste of both finances and opportunity, says Karen Soames, head of business development at Training 2000: “Levy money can be invested in a number of ways: it can be used to upskill the current workforce in a wide variety of areas to support business needs, including level 2 qualifications up to degree level. Funds can also be utilised to bring in new talent and fill any skills gaps.”

Hannah Baker, business development manager, apprenticeships at Blackburn College, adds: “Unspent levy can also be used by employers to support development in other organisations, which is a great opportunity to support their own supply chain or of other local businesses.”

However, the levy funds have a 24 month expiry date, and many businesses have already seen the cash set aside in 2017 disappear. 

There are two major changes coming in the next 12 months which should make it easier for businesses to engage with apprenticeships.

One major flaw is being ironed out: the rollout of new apprenticeship standards, which have been designed in partnership with employers themselves, in place of the old and often unsuitable frameworks. The idea was good, the implementation was neither smooth nor timely, and employers were left confused about what courses were left available to them.

Karen Soames of Training 2000 said: “All old apprenticeship frameworks will be withdrawn by August 2020. In place will be apprenticeship standards which have been designed and led by employers. 

“This is significant, and now more than ever employers are in charge of apprenticeships: they set the standards, create the demand, provide the platform for learners to showcase skills and are responsible for employing and supporting the training of their apprentices.”

This year will also see the full Apprentice Service open up to SMEs, allowing them to manage apprenticeship training and funding in the same way as levy companies. 

Gareth Lindsay, managing director of the North Lancs Training Group, said: “As funding moves from a government ‘contract led’ system to funding through the AS, communicating this change and supporting SMEs is key. NLTG has expanded the services of its dedicated Apprenticeship Service Engagement Team (ASET) to provide specialist advice and support to SMEs in creating digital accounts, reserving funding and navigating the new system.”

Over the past two years NLTG has seen increased engagement with levy companies; a trend which Gareth anticipates continuing over the next 12 months.

We are training our apprentice in the skills we require for the future successful running of our business

Victoria Carter, engagement manager at Lancaster & Morecambe College, agrees that the figures are trending in a positive direction.

“We have seen a 23% growth in the uptake of apprenticeships and we are hoping we can increase this further over the next academic year,” says Victoria.

“If smaller businesses are struggling to pay the 5% employer contribution required for an apprentice there are larger businesses that are willing to share their levy.  We are hopeful that within our district that the larger organisations will pledge to support the smaller businesses to support the economic growth of the district.

“Businesses, individuals and the local economy can benefit from apprenticeships. Nationally, 86% of employers said that apprenticeships helped them develop skills relevant to their business and 78% said apprenticeships improved productivity.”

Hannah Baker of Blackburn College added: “Individuals, employers and the local economy all benefit from the skills uplift that comes with apprenticeship training.

“For individuals, an apprenticeship represents a valuable opportunity to learn new skills, start on a professional pathway and gain industry relevant qualifications. Employers benefit from a cost effective way to train new and existing staff through recognised training programmes that are respected by their sector. All types of businesses can use apprenticeships and increasingly we are seeing apprenticeships used for professional development as well as for new staff recruitment.”

Barbara Livesey, director of apprenticeships and training at Nelson and Colne College Group, explained how providers will work with employers to help them get the most from their investments.

She said: “In our experience, barriers that businesses see to taking on apprentices can often be alleviated by a flexible approach to delivery, and wrap-around support that means day-to-day business performance is not affected. We can help with that.

“As part of our group’s approach to apprenticeship delivery, we work around the business needs, and this can be apprenticeships that start at any time of the year working to a business timetable; a dedicated trainer assessor for each apprentice and workplace visits arranged to suit the apprentice and the business; one to one support in the workplace for apprentices needing Maths and English qualifications; and an account manager to support with managing apprenticeship programmes.”

Even skills providers themselves have begun taking on apprentices of their own. Highfield Priory School and Nursery trains apprentices in early years education, as well as employing an apprentice, who is studying business management, in its front office team.

Lancashire is one of the leading counties for apprenticeship opportunity and engagement

Amanda Heywood, the school’s business manager, said: “As the workplace provider, we are benefitting as we are training our apprentice in the skills we require for the future successful running of our business with the hope that he will choose to remain with us at Highfield.

“Apprentices benefit from working alongside practitioners who are experienced and skilled in their field and businesses benefit from seeing their workplace through fresh eyes and offering bespoke training for the future success of their company.”

Tim Cutler works for the Lancashire WBL Executive Forum, which is made up of 20 of the county’s colleges, training providers and universities and promotes apprenticeships and work-based learning.

He says that Lancashire is rich with providers, giving local businesses a great selection to choose from.

“Lancashire is one of the leading counties for apprenticeship opportunity and engagement,” he said. “We are blessed to have such a strong network of Lancashire providers who work very closely with a very high percentage of Lancashire based businesses to develop and deliver exceptional quality work based education with supporting training facilities that are rich and diverse.”

Any business interested in learning more can read about the Lancashire Skills Pledge. By registering your interest, the Forum or other pledge partners will get in touch to provide impartial information and guidance in meeting your employment needs, no matter your size or sector.

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