When most people think of apprenticeships they think of teenage bricklayers or school-leaving mechanics.
While those trades are important, in demand and offer great careers, apprenticeships are about far more than that – and can be real assets to any business.
This week is National Apprenticeship Week which has given us the ideal opportunity to talk more widely about how Jonathan Lee Skills Consultancy can help businesses make the most of their Apprenticeship Levy contributions.
Since April 2017, any company with an annual employee wage bill in excess of £3 million has been required to make monthly payments to the Apprenticeship Levy, an initiative launched by the government to encourage employers to invest in training. In reality though, many businesses have just thought of the levy as a stealth tax – another money-making scheme from Whitehall.
Figures revealed by the National Audit Office in March show that UK employers deposited £2.2 billion into the Levy in 2017-18, but only 9% of the total has been accessed and reinvested in staff training and development programmes.
Businesses can withdraw the total value of their contributions to fund apprenticeship schemes through recognised training providers within two years of the payment dates; any money not accessed within that timescale is lost to the Exchequer with the first contributions becoming forfeit from April 2019. That means businesses will start to lose money in just a matter of weeks and do not appear to be taking action. But why is this? We think it boils down to a lack of clarity and understanding.
The levy is a funding mechanism by which employers can drive business improvement, address skills shortages and improve retention of key staff – all of which can have a significant, positive impact on productivity and help a company grow. What’s more, in the majority of circumstances, Apprenticeship Levy funds can be used to finance all of the training needs of a business, not just those of entry level employees.
Despite this, Jonathan Lee Skills Consultancy is discovering that many employers are spending vast amounts on commercial training while simultaneously paying six or seven figure sums into the levy. Many businesses simply haven’t realised that spending can be offset against their levy contributions and are essentially paying for training twice.
Apprenticeship Levy funds can only be used on apprenticeships, but this terminology now covers a very wide spectrum of subjects, specialisms and levels, some of which are equivalent to a Master’s degree. The Government is bringing out new frameworks and programmes on an almost daily basis and our role is to help employers understand the new system and how to use it as a vital training tool.
We also hear concerns from employers about the requirement of off-the-job training, fearing that they will lose their staff for one day a week to college. That is also far from a reality under the scheme; learning can be delivered in the workplace or in virtual classrooms so the immediate impact on productivity is minimal. In fact, apprenticeships are no longer off-the-shelf commodities. Content can be tailored to make courses directly relevant to both the individual and the business needs, giving employers far greater control.
So our message to businesses this National Apprenticeship Week is this:
- Think about the Apprenticeship Levy and how it can benefit you and your staff.
- Use the money you have already invested to give your people the training and development they need.
The scheme is likely much more flexible than you think.
Contact us for information on how Jonathan Lee Skills Consultancy can help.