Why aren’t companies doing more to capitalise on the apprenticeship levy, when we’re in a digital skills crisis?

What would you do with £3 million if the government gave your company access to that tax-free sum to put towards an apprenticeship programme? If the stats around the topic are correct, the answer is not much.

Back in April, the Open University’s report The Apprenticeship Levy: One Year On revealed that more than £1.28 billion of the funding that has been paid into the apprenticeship levy remain untouched in National Apprenticeship Service accounts.

Analysis of data from the Education and Skills Funding Agency acquired through a request under Freedom of Information Act also shows that a year since the launch of the apprenticeship levy, organisations have paid in more than £1.39 billion but only withdrawn £108 million.

Employers have blamed the red tape and inflexibility of the programme for its failure to take off, which has meant that only 10 % of apprenticeship funds have been spent since it was introduced 12 months ago.

The UK government, in a desperate bid to make the programme work, has tried to rejig the initiative – allowing large employers from July to transfer up to 10% of their apprenticeship levy funds to multiple businesses – thereby helping to increase the number of high-quality apprenticeships.

If this does work, and businesses start tapping into their levies, then where should they invest the money?

Everyone is talking about the challenges of diversity and filling the skills gap that exists in the UK tech sector. The issue was magnified last year, when chancellor Philip Hammond announced his annual Budget to the House of Commons.

His Autumn Budget outlined plans to invest in new technologies – including AI, 5G and broadband – and crucially, to create a plan to increase digital skills across the country.

With Brexit looming, and fears of skilled foreign workers leaving the country, businesses should be working towards training the next generation of software engineers and IT specialists  – with a focus on diversity so that they reflect the society we live in.

Good training costs money – and the best courses are often too cost-prohibitive for most aspiring students or returning parents who want to consider a job in tech.

Going down the student loan route is one answer, but the burden of debt puts off many people off. Also, having to work and train at the same time is problematic for most people who need to pay the bills.

We believe that best answer to addressing the tech skills and diversity gap in the country is through the Apprenticeship Levy, and spending money on the training courses offered by members of the Register of Apprenticeship Training Providers (RoATP).

Government might want to work more closely with providers to understand which types of skills gaps and procurement problems are looming, but also to help smaller businesses with co-investment problems.

There should also be checks and balances in place so that the apprenticeship programmes on offer truly give people proper skills that will be useful to the employer and will provide proper career prospects.

Working with coding and software engineering schools that provide the training to plug the tech skills gap could also help to ensure that apprenticeships are truly effective for everyone. The catch is that the apprentices are also being paid a wage to be trained for those skills – skills that employers actually need and can use the moment students graduate.

This is the route that Makers is taking and it will be the first coding bootcamp in the UK to offer trainees top and in demand coding skills that they can use immediately after completing the programme by working with one of the government levy paying companies Makers have signed up.

Vocational schools should follow a similar model. It’s a win-win situation for everyone. This is about giving employers the power to create the workforce that will make them successful – and that means establishing a diverse talent pool that will help the UK’s tech sector grow and thrive.