The Apprenticeship Levy does not go far enough and needs to be refocused says AAT

AAT has long supported measures to address decades of chronic underinvestment in skills but we don’t think the Levy goes far enough.  AAT has always backed the Government’s target to have  three million apprenticeship starts by 2020, but has simultaneously argued for an equal focus on both the quality of apprenticeship schemes and completion rates. 

There is little point in having a target for the number of people starting an apprenticeship if many don’t finish. Most sectors have enviable completion rates, for example of the thousands of students taking an AAT apprenticeship each year, over 90% complete their course. However, official statistics show that nationally more than a third of all apprentices fail to complete their apprenticeship. This compares to just 6% who drop out of higher education in the UK each year. Likewise, what is the point in undertaking an apprenticeship if it either holds little real value in the eyes of some employers or provides too little by way of transferable skills and knowledge for the individual? Unfortunately, in a small but still significant number of instances, this remains the case.

In time, AAT would like to see the Apprenticeship Levy renamed as the Skills Levy and for levy monies to be able to be spent on high quality traineeships and other forms of training that will benefit individuals, employers and the economy as a whole.

We are not alone in thinking this would improve matters. AAT recently surveyed MPs across all parties on this issue and found that 65% support our suggestion that the levy should be developed to allow funding for skills other than apprenticeships.

Increasing the flexibility of the levy would foster improved productivity across the whole workforce, deliver greater value for money and yet have no significant revenue implications for the taxpayer. It might also help encourage more small and medium-sized businesses (SMEs) to take on apprentices. Given that 99% of businesses in the UK are classed as SMEs, this provides a significant pool from which to drive up apprenticeship numbers.

Luckily businesses across the UK are now starting to wake up to the power of apprenticeships.  In our recent ‘Getting ahead for accelerated ambitions’ study, we found that almost half (48%) of UK businesses surveyed have taken on apprentices in the last five years, highlighting that apprenticeships can act as a catalyst for young people to get a foot on the employment ladder.  Over half (51%) of employers that have taken on candidates who have completed an apprenticeship  confirmed that apprentices have generally performed better than those with a university degree.  For many employers, degree level qualifications are now less important than the right attitude and relevant work experience. 

The future looks bright, but we need to ensure that any reforms are fit for purpose to make the future even brighter for the next generation.

Adam Harper, Director of strategy and professional standards at the Association of Accounting Technicians

About AAT:

• AAT (Association of Accounting Technicians) is the UK’s leading qualification and professional body for technical accountants and bookkeepers, and has over 140,000 members in over 100 countries. We offer a range of qualifications that are open to all regardless of previous education or age, such as the AAT Accounting Qualifications that provide a non-degree route into chartered accountancy, and the AAT Bookkeeping Qualifications that can support business growth through accurate and up-to-date financial records. Students encompass a wide range from school and college leavers, to older people hoping to change their career or learn the skills to run their own business.

• An AAT Accountant is a qualified accounting professional with the practical and technical skills needed to support businesses with their accounting activities. Typical job roles of an AAT Accountant include: Financial Accountant, Commercial Analyst, Senior Finance Officer, Payroll Manager, VAT Accountant and Tax Supervisor. An AAT Accountant in the UK can sign off the accounts for small companies that meet two out of three of the criteria of turnover less than £10.2 million, total assets less than £5.1 million and less than 50 employees. Currently over half a million businesses trust AAT Accountants and AAT Bookkeepers to service their accounting requirements.

• AAT awards around 90% of all technical qualifications in accounting in the UK, and generous exemptions are provided by many of the senior UK bodies including CIPFA, ICAEW, CIMA and ICAS. AAT has been listed in the Sunday Times 100 Best Companies to Work For 2017.