Managing misconceptions to make the apprenticeship levy work for businesses - Business Voice

Managing misconceptions to make the apprenticeship levy work for businesses - Business Voice

Managing misconceptions to make the apprenticeship levy work for businesses - Business Voice

The government has "some way to go" before it can show that the apprenticeships programme is achieving value for money, according to National Audit Office.

The apprenticeship levy charges all employers with an annual pay bill of more than £3m at a rate of 0.5 per cent of their total pay bill. Under a standard, the apprentice is assessed at the end of their apprenticeship.

"Even though they are only spending a small amount of their levy pot at the moment, the next few years could see the amount of money running over government budgets, with the risk of employers rebadging quite expensive development courses as apprenticeships driving up that overall spend".

Already it's had a great start, with the launch of the new apprenticeship "Fire It Up" campaign in January - which focuses on changing the "not-for-me" mindset towards apprenticeships - and is making a significant splash across TV, billboards, digital and social channels.

The NAO has suggested this is because employers are choosing higher level apprenticeships, which tend to be more expensive. This also means that it is more likely the apprenticeship programme will overspend. In the financial year starting April 2017, levy-paying employers used nine per cent of the funds available to them to support new apprenticeships, equating to £170m of nearly £2.2bn available.

"Companies are committed to apprenticeships, so what's needed now is a second wave of reform".

The government radically changed the apprenticeship system in 2017, introducing a levy or tax on large employers which they can then claim back to fund training.

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As a result, the head of the NAO, Amyas Morse, said that the Department for Education (DfE) was very unlikely to achieve its target of creating 3 million new apprentices by 2020.

"The number of people starting training on our new employer-designed standards is rising year on year and we will continue to work with employers to help them develop their apprenticeship programmes", she said.

Also, there has been a decline in the lower-level apprenticeships and a rise in the higher, degree equivalent ones.

The NAO report reinforced the fact that the ESFA still has limited assurance that apprentices spend the required 20% of their time on off-the-job training, typically with their training provider. The programme's budget for 2018-19 is £2.2bn.

At the same time, it noted that around a third of apprentices covered by inspections in 2017-18 were trained by providers rated by Ofsted as "inadequate" or "requires improvement".

GMCA has been working to improve the quality and grow the numbers of apprenticeships in Greater Manchester, which saw 22,591 apprenticeship starts in 2017/18.

JCB chief executive Graeme Macdonald said: "New talent joining the business is fundamental to JCB's future growth and success; our business is growing rapidly and the apprentices are an important part of our plans for the long-term".

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