Greater flexibility for apprenticeship levy as transfers extended – Sector Response

Following the government’s announcement yesterday (26 Jun) on allowing large employers to transfer up to 10% of their apprenticeship levy funds to multiple businesses:

Mark Dawe, CEO at the Association of Employment and Learning Providers (AELP) comments:

If it means more levy money is being used for apprenticeships and more of it reaches SMEs, which is desperately needed, this can only be a good thing.  Over time, the government might want to review whether 10% is the right limit.

Stephen Evans, CEO of Learning and Work Institute, said:

More flexibility in transferring apprenticeship levy funds is welcome. Businesses today often have complex supply chains, so this has the potential to help money to go where it is most needed. This was something highlighted in our recent essay collection on the future of apprenticeships – it can help support small businesses, and there’s a crucial role for local authorities in building a joined up system.

Of course we also need a much bigger focus across the apprenticeship reforms on quality and access. The building blocks are there, with the levy and move to standards. And we’ve set out our ideas for next steps, including benchmarking standards against the best in the world and a new Apprentice Premium to widen access.

Teresa Frith, Senior Policy Manager at the Association of Colleges, said:

Apprenticeships are an increasingly important part of the long-term plan for improved workforce development and enhanced productivity in England. There is a strong will amongst those who recognise the benefits of apprenticeships to make the reforms and the levy work – this flexibility is welcome.

We hope that Government continues to take the opportunity to work with employers, colleges, training providers and others to build the programme in terms of quality, access and outcomes.

Petra Wilton, director of strategy and external affairs for the Chartered Management Institute, said:

Increasing flexibility of Levy spending through the supply chain is a good start, but we need a real transformation rather than tweaks to make it work for all. The current system is too bureaucratic, too spread out and too confusing for many employers to navigate.

As our 10-Point Plan for reforming apprenticeship with the BCC sets out, government should appoint a single accountable organisation to ensure we have a stable, high quality and consistent apprenticeship landscape. It should then be responsible for the successful creation, funding, execution and monitoring of apprenticeships and ensure employers’ voices are fully heard. 

Fixing apprenticeships is critical for driving-up productivity. Those big employers who’ve managed to work out the new system are already seeing the benefits. But to close the professional skills gap that employers are already experiencing in the run-up to Brexit, we need many more to get on board.

Apprenticeships and Skills Minister Anne Milton said:

It’s fantastic to see so many businesses taking advantage of the opportunity that the apprentice levy provides. As well as kick starting their apprenticeship programmes, business is now recognising the benefits an apprentice brings to the work place with enthusiasm and new ideas.

We want to keep improving apprenticeships for everyone and I am delighted that we are now extending the flexibility of the apprenticeship levy. If we look at what the Berkeley Group and Norfolk County Council are doing, this is business and the public sector using the apprenticeship programme to change people’s lives.

The Berkeley Group Executive Director Karl Whiteman said:

The construction industry is at a crossroads with more people leaving than joining, just as we need to build more homes. The Berkeley Group has always supported our supply chain to recruit apprenticeships. Over the last 2 years, we have had more than 850 apprentices on our sites and in our offices. We welcome the opportunity to continue this not just in an advisory capacity but financially with the new changes which allow us to share our levy with many more contractors.

Norfolk County Council was the first organisation to make a transfer of apprenticeship service funds. A spokesperson for the council said:

From the moment the levy was first announced, Norfolk County Council’s leadership team wanted to ensure that some of our levy could be used to support Norfolk people who have all the necessary skills and abilities to complete an apprenticeship successfully but have barriers that sometimes prevent them from achieving successfully.

Working with TrAC, we have developed a pilot designed to help 30 young people to get and achieve an apprenticeship and Norfolk County Council is transferring levy to TrAC to support these apprentices.

All of these apprentices are referred by the council and will be employed by TrAC who will place them with other host employers throughout their programme. Both the apprentice and the host employer receive additional bespoke support throughout the programme.

Employers given green light to transfer up to 10% of levy funds to multiple businesses.

Large employers will soon be able to transfer up to 10% of their apprenticeship levy funds to multiple businesses, helping to boost the number of high-quality apprenticeships across the country.

Apprenticeships and Skills Minister Anne Milton announced the move at an event attended by over 160 top businesses to celebrate apprenticeships and the significant contribution they are making to their businesses and the wider economy.

The apprenticeship levy is giving employers a real opportunity to invest in high-quality training, helping to grow their business and get the skilled workforce they need to thrive and succeed. Only around 2% of employers pay the levy but that investment has funded more than 40% of the apprenticeships started in the last year.

Currently, levy-paying employers can transfer up to 10% of their apprenticeship service funds to one other employer. After listening to businesses, the Minister’s announcement today goes further and provides even greater flexibility for businesses, so that from July, employers will be able to make transfers of up to 10% to as many other employers as they choose.

This move will lead to more quality apprenticeships being created and will help employers to work together in partnership, supporting them to take on apprentices who may not have done so otherwise.

The announcement follows another significant boost to apprenticeships this week, with new high-quality apprenticeship standards in bricklaying and plastering being approved for delivery by the Institute for Apprenticeships. Around 4,000 apprentices are expected to enrol on the bricklayer apprenticeship every year and up to 1,500 apprentices to undertake plastering each year.

The new standards were designed by employers and are backed by the Federation of Master Builders. Construction is a growing and important sector and the new standards will give apprentices the skills that the construction sector needs.

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), said:

These higher quality construction apprenticeships have the potential to help solve the construction skills crisis. The bricklayer and plasterer apprenticeships were designed by employers which will ensure they produce the tradespeople they need. The apprenticeships are longer in duration and cover a broader range of knowledge and hand-skills. This not only benefits the employers but also the apprentices who will be arming themselves with a wider range of skills for their future careers.

Sir Gerry Berragan, Chief Executive of the Institute for Apprenticeships, said:

As sector specialists, the Bricklayer and Plasterer Apprenticeship Trailblazer Group really understood employers’ needs, and they’ve worked hard to include the skills and experience that would best serve both employers and apprentices in these occupations for the future. Ultimately, these apprenticeships will produce well trained, skilled employees who can add significant value and help their organisations thrive.