Apprenticeship Levy Incentive or Deterrent?

Published on 21st September 2016
Supply Chain

Regular readers will be aware of my commitment to training generally, and Apprenticeships in particular. It is an issue that particularly affects the Construction Industry which has a well recognised skills shortage issue. I have in past columns reflected that proactive training strategies can form a key element of attracting new high quality entrants into the sector.

Therefore it is always encouraging to see policy initiatives from the highest levels of Government that recognise and assist business to grow the levels of apprentices into industry. It also represents a welcome re-balancing of the emphasis in further education strategy between academic and vocational qualifications.

It was encouraging to read recently that there are now over 1000 young people participating in degree level apprenticeships – this is something that needs to grow if we are to attract the very best into Construction.

With 70% of employers reporting that recruiting Apprentices increases the quality and standard of work carried out the win-win nature of apprenticeship recruitment is an obvious factor.

What then, are we to make of the recent policy statement on apprenticeship funding from the Department of Education?

The first thing to say is that nobody likes change, and when something new is proposed people naturally cling to the comfort of what they know.

But if we try and think beyond that initial reaction, we should applaud any initiative with the general objectives that the Government have set out. However, as with most things in life the devil is in the detail.

The scheme as it currently stands has many positives; particularly the way in which it has been structured to support and encourage SME’s to become more involved in growing apprenticeships on offer. This is good for those businesses and also the people they recruit into industry.

However, it seems to me that this increased support comes at the expense of larger businesses where a cap of £15k funding has been put in place, therefore despite Governments ‘spin’ about increased resource in this area, it feels as though they are ‘robbing Peter to pay Paul’. This will have the effect of larger employers reviewing the approach, almost certainly reducing the numbers they recruit in direct proportion to the increase secured through SME’S and therefore somewhat self defeating.

A more enlightened approach would have been to invoke the support for SME’s whilst perhaps allowing funding for larger employers based upon the value of their % contribution based upon turnover.

Another observation is that as things stand the Construction sector stands to be ‘penalised’ with two levies during 2017 until the two schemes align. Perhaps not the wisest of approaches given the post – Brexit turbulence within the sector, most notably in House building.

In taking this approach I believe the Government have missed an opportunity to really attract more numbers and meet strategic targets for apprentice numbers.

With those observations made, we are in a period of consultation and it is incumbent upon all companies, large or small to feed back views to their representative bodies so we can challenge and work with the Department of Education to deliver the structures that deliver the outcomes all parties’ want- more and better quality apprenticeships.

I am sure that this type of approach will have the full backing of such former apprentices as Sir Alex Ferguson, Jamie Oliver, Karen Millen, Sir Ian McKellan and also as a former Electrical Apprentice one Tony Burke!