AELP: Reforming the apprenticeship levy needs a cautious approach

At its National Conference, the Association of Employment and Learning Providers (AELP) has responded to ongoing calls for the Apprenticeship Levy to be opened up to allow more flexibility on how it can be spent.

AELP has recognised that employers have argued for more flexibility in the Apprenticeship Levy, but argues for a cautious approach to reforming the levy ensuring apprenticeships remain the primary focus. AELP stress that change should only occur alongside the creation of a separate and guaranteed ring-fenced budget for 98% of employers that do not pay the apprenticeship levy.

In her keynote speech to National Conference, AELP Chair Nichola Hay MBE, outlined how the organisation supports the principle of allowing levy-paying employers a degree of wider flexibility to fund the procurement of high-quality accredited qualifications alongside the core apprenticeship training and assessment. Delivery of these should come from a list of approved training providers and any flexibility needs to be offset with a commitment to non-levy paying employers’ ongoing access to funding for apprenticeship training and assessment.

Introducing flexibilities to how the levy can be spent has the potential to impact on the ability of non-levy paying employers – in the main small and medium size employers (SMEs) – to take on apprentices. As a result, AELP is calling for any reforms to also include a separate and guaranteed ring-fenced non-levy apprenticeship budget to support the 98% of employers that do not pay the apprenticeship levy.

To ensure a successful transition to a more flexible Apprenticeship Levy system, AELP is calling for a cautious approach, with an initial trial period to assess the impact on employer behaviours before a wider relaxation and opening up on flexibilities takes place.  AELP does not support the use of levy funding on non-training items such as wages and backfill costs as this would add significant pressure on the finite about of funding available.

AELP is also using this opportunity to again highlight the growing divide between the level of money paid through the levy by employers and the Department for Education’s apprenticeship programme budget. Ultimately employers are being short-changed with funding that should be used to support wider and deeper funding band increases and targeted employer incentives aimed at non-levy paying employers and young people specifically.

Speaking at AELP’s National Conference in London, Nichola Hay MBE, AELP Chair, said:

“Additional flexibility for levy payers, allowing them to access the levy funding for non-apprenticeship training, while on the face of it desirable, needs to be tempered by dedicated support for SMEs.

“We would welcome a gradual introduction of some flexibility in the levy for levy payers. We always put learner and employer choice first, and recognise that for some organisations an apprenticeship may not be the desired choice for upskilling staff. However, this must be coupled with the introduction of a guaranteed ringfenced apprenticeship budget for SMEs to offer appropriate protection.”