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Now’s the time to utilise the levy, and how

Daniel Lally
Apprenticeships

Many claim that the Apprenticeship Levy is a disaster and British businesses are avoiding it due to complications and red tape. According to the latest statistics apprenticeship starts have dropped a whopping 61% in 2017 compared to the same period last year. Contributor Daniel Lally, Levy Business Consultant.

The Levy offers businesses with a payroll of over £3m the option of getting training back in return for the money they pay into the Levy, any unspent money will be wasted as it is returned to the treasury at the end of the funding cycle. The levy funds can be used to fund apprenticeships for all levels of employees within a business from new starters to up-skilling existing more experienced employees to achieve higher levels of skills.

So What’s Happened In The Last Six Months?
Daniel doesn’t think that business leaders are likely to waste this opportunity – businesses just want to get it right but in some instances they are finding certain red tape challenging: “Common issues that large Levy payers have are that the reforms, most importantly the bottom line costs, have forced them to think strategically, this takes time. The majority of businesses are having to re-evaluate their talent management and their learning and development approach and need to take a very strategic view of the Levy to maximise its benefit – this is a process that can’t be rushed.”

Levy payers are often large, complex organisations and have the added challenge of trying to align their business’s internal practices, culture and requirements within the context of an appropriate apprenticeship standard whilst showing a return on investment.  For some this even means having to align a new programme to global strategies and competency frameworks – something that might require buy-in across multiple time zones.

But they can’t plan forever. Employers have two years before funds expire. This stops the immediate panic for businesses but mathematically there comes a point before the two year point where the accrual outstrips the possible spend meaning that they need to get going now or they will end up handing funds back to the treasury.

Daniel’s experience is that businesses are at times having difficulties engaging potential or existing staff on Apprenticeship Programmes due to the association with the apprenticeship brand and a long held perception that Apprenticeship’s are just for certain age groups or certain career paths.

It is estimated that a university education now costs just under £30k in fees alone in the UK, an apprenticeship enables a learner to earn whilst they learn and not rack up thousands of pounds of debt. This is an excellent opportunity which will see some great candidates, who couldn’t otherwise afford or wish to undertake the University route to join the job market.

Lally continues; “As a provider, our main focus is social mobility, we really see an opportunity for people who have the potential, but not the financial backing or particular learning style required or the will, to go to University to get into skilled careers in a way they have never been able to before.

“There is a chance for British business to up skill their workforce and deliver real returns by taking advantage of the Levy. Whether our apprentices are new starters or existing employees who have been working for some time and want to go on to the next stage, we hope to see people moving up the career ladder in turn creating new opportunities for others.”

Tips for the next 6 Months

Don’t Be Levy Led
Communicating to your staff that your strategy is about meeting the future skills requirements of your business, not “because the government has introduced a new tax”, but because you understand what your business needs to achieve and how your employees can help you achieve it, ensures the workforce takes it as seriously as you do. Communicating what this means for individuals and their teams will help with engagement.

Think About Progression
Where will the learners go next? Where are the skills shortages within the business? What do your future skills requirements look like? These are quite standard questions but coupled with the possible bureaucracy of government funding (eligibility, progression rules, emerging standards) it is critical to lay this out at the outset – your chosen partner should be able to fill in the gaps here.

Choose The Right Partner
As with all relationships, finding the right partner is much more than the ‘offer’, matching culture, ethos, direction and skill sets will enable a fruitful long-term relationship. All stakeholders in the partnership need to buy into the strategy, understand it and own it.

Keep Up To Date
There may soon be the option for larger organisations to pay their levy funds down to smaller businesses within their supply chain. This would help them to up skill and improve the services they offer and could have a huge impact on the whole market – as long as it is delivered within clear guidelines.

Lally continues; “The introduction of complicated new rules and lack of preparation and consideration have created the perfect storm which is having 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. However we anticipate that we will start to see the execution of the planning that has happened in the last six months in January 2018. We have multiple programmes which have been months in the making that are set to launch in the new year.” However, Lally advises that the market still needs clarification on some big factors from the government to make sure the very best is made of this opportunity.
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