Reaction to the apprenticeship levy details

On the day the Department of Education published its plans for the implementation, industry players have offered their reaction:

Stephen Evans, deputy chief executive at Learning and Work Institute, said the new measures should provide employers and providers with some clarity to allow them to plan for the introduction of the new apprenticeship funding system in April.

“Learning and Work Institute is currently working to make apprenticeships more accessible to those who are currently under-represented, including those from BAME backgrounds and with disabilities. I welcome today’s announcement that government will fully meet the apprenticeship training costs for young care leavers and young people with EHC Plans, alongside a further commitment to support additional costs. I would encourage the Department to use this policy to drive a new Access agenda – much like what we have seen in higher education – to include other under-represented groups such as young adult carers.

“The clear emphasis on quality in today’s announcements is welcome. Learning and Work shares the views of many employers who believe apprenticeship quality is just as, if not more, important than quantity. However, I challenge the view that an Ofsted grade alone is the most effective measure to use for the purposes of the new Register of Apprenticeship Training Providers – measures of quality must be timely and rounded which is why we’ve called for an Apprentice Charter, designed by employers and Apprentices.”


‘Vital to maintain SME incentives’

Meanwhile, Mark Dawe, CEO of the AELP said he had concerns about how SME engagement in apprenticeships would be tackled.

“The AELP has concerns about how the reforms will impact on non-levy paying employers despite the announcement that small businesses will continue to have their apprenticeships for 16 to 18 year olds funded by government.

“The proposed subsidy rate of 90% for larger SMEs means that mass disengagement on their part may now be avoided but the insistence of a cash contribution from these employers could in our view still have a very negative impact. Therefore AELP has asked ministers to keep the matter under review. The requirement should be quickly phased out if our fears about the impact are realised.

“Since the publication of the Richard review proposals for apprenticeship reforms in 2012, AELP has led a relentless campaign to retain incentives which will keep SMEs on board the programme. These businesses account for more than half of the available apprenticeship opportunities and help make them inclusive for young people across both urban and rural areas. Withdrawal of these employers will damage the new government’s social mobility agenda and its ambitions for improved productivity.

“Apprenticeships must be at the heart of the prime minister’s social mobility agenda and this is why it’s vital that incentives are maintained for smaller businesses to offer young people a high quality start to their careers.

‘We’ve also said to the government that it must maintain a guaranteed level of funding for the apprenticeships offered by non-levy payers, i.e. it shouldn’t just hope that the levy proceeds are adequate to cover the funding of apprenticeships in all businesses.”


‘A much needed injection of confidence’

The Chartered Management Institute, meanwhile, welcomed the new measures.  CMI’s director of strategy, Petra Wilton said: “Apprenticeships are a proven route for raising business productivity. Leading employers are already adopting the new professional pathways such as the Chartered Manager Degree Apprenticeship. The generous levels of government co-investment announced today are welcomed by many employers, especially small businesses which now have a great incentive to take on apprentices.”

“I strongly encourage employers to get involved and ensure that this extensive new offer fully meets their needs. As it can provide the much needed injection of confidence and certainty in the skills agenda, which is needed now more than ever.”


‘Get the most from the levy’

Finally, an employment law firm has suggested that employers look into ways of maximising their return from the levy.  Chris Holme, Employment Partner at Clyde & Co, said: “All employers with an annual wage bill above £3m will have to pay for the costs of this new scheme, which comes into force in April 2017. The scheme is funded by a 0.5 % payroll tax on all large employers in an attempt to address the skills shortage in labour markets in the UK.”

“Given the costs to large employers, they should now all turn to thinking about how they can take “something back” from the scheme by reviewing the list of apprenticeships which can be covered.  This includes those employers who may not think that apprenticeships would traditionally apply to them – with assistance available from the training of actuaries, through to lawyers, through to hospitality.”