The Apprenticeship Levy is to be introduced this year, and will potentially affect all businesses. Here are some of the changes that have been made to what was seen as an unpopular Levy:
- 20 per cent extra funding for 16-18 year-olds. This is in addition to an extra £1,000 which will be paid to both the employer and provider for supporting an apprentice aged 16-18.
- Employers with less than 50 staff who will not be paying the Levy will not have to make a 10 per cent contribution to the cost of the apprenticeship for 16-18-year olds. It will be fully funded by the Skills Funding Agency.
- £60m of additional support in areas of disadvantage.
- Expiry of funds in digital accounts extended from 18 to 24 months.
Will these changes affect please those in the industry? Let’s take a look.
NFB: Government skills policy should not be guided by numbers only.
The Institute for Fiscal Studies (IFS) has cast doubts about the Government’s policy to increase the number of apprentices.
The Government pledged to fulfil its election promise to create three million apprenticeships by 2020. This will be funded by the new apprenticeship levy, which is scheduled to come into effect from April 2017.
The IFS contested the Government’s claim that the apprenticeship levy will generate £2.8 billion by 2019-2020, arguing instead that apprenticeship spending will rise by just £0.6 billion.
The National Federation of Builders (NFB) has previously called on the Government to develop a strategic and targeted approach to addressing the construction skills crisis. With many workers set to retire by 2025, the construction industry needs to recruit at least 40,000 new workers a year to cope with its current work pipeline.
However, the NFB believes that the current Government’s approach to this issue is neither strategic nor targeted.
Paul Bogle, head of policy and research for the NFB, said: “The skills shortages in construction differ from region to region. That is why we need a more targeted approach.
The Government’s apprenticeship levy seems driven more by the self-imposed need to meet numerical targets, rather than focusing on providing high-quality apprenticeships. That is not what the construction industry needs.”
MPs and accountancy bodies: Apprenticeships policy must change
Almost half of all MPs (46%) think the Government’s three million apprenticeship starts target ignores the importance of both quality and completion rates and should be modified, according to a new study commissioned by AAT (Association of Accounting Technicians) and the Association of Chartered Certified Accountants (ACCA).
Following the publication (31 January) of the Institute of Fiscal Studies’ report claiming apprentice targets represent ‘poor value for money’, both AAT and ACCA have backed the Government’s commitment to three million apprenticeship starts by 2020, but only if supported by a focus on timely completions and overall quality.
The accountancy bodies also think that the Apprenticeship Levy, which comes into force this April, should be renamed as the Skills Levy and for levy monies to be able to be spent on high quality traineeships and other forms of training other than apprenticeships. This will benefit individuals, employers and the economy as a whole.
A recent YouGov study commissioned by AAT and ACCA found that the study, conducted by YouGov with MPs from across the political divide, also showed that almost two thirds of MPs (65%) think that the Apprenticeship Levy should be developed to allow funding for skills other than apprenticeships.
John Williams, Head of ACCA UK, said;
“It is reassuring to see that there is strong political support for a focus on quality and skills. For accountancy, apprenticeships not only offer an important non-graduate route into the professions but also an opportunity for ambitious young people from all backgrounds to develop work-ready technical skills which will enable them to thrive in the evolving 21st century workplace.
“With Government unveiling a new Industrial Strategy, and business preparing itself for the impacts of advanced robotics, the availability of high-quality apprenticeships and traineeships will play an integral role in enabling the UK’s financial and professional services sector to continue to lead the world in the short and long term. It is therefore a top priority to ensure we continue to build support and awareness of the value of apprenticeships both in Parliament and across the education sector.”
Mark Farrar, Chief Executive, AAT said;
“It’s good to see so many MPs sharing our views, because although we have long supported the three million apprenticeship starts target, we have been concerned about completion rates and quality for just as long.
“Likewise, we strongly believe that the Apprenticeship Levy should be widened in scope to allow for investment in high quality traineeships and other forms of training. Again, many MPs agree with us and even the Secretary of State for Education recently expressed a willingness to consider such a development. However, until this happens we shall continue beating the drum, not just for the accountancy profession but for the sake of the wider economy.”
Other key findings from the survey include:
- The majority of MPs think the big four accountancy firms (EY, PwC, Deloitte and KPMG) are moving away from graduate recruitment towards a greater focus on apprenticeships (55%)
- Three quarters of MPs believe careers information advice and guidance in schools is too heavily geared towards a University education (75%)
- The vast majority of MPs believe that the views of parents and teachers need to change if vocational/professional/technical education is to gain the same recognition as academic education (86%)
AAT recently announced it has been approved as an Apprentice Assessment Organisation (AAO) for the Accounting Trailblazer Apprenticeships, a Government initiative designed to give employers the opportunity to take the lead in developing apprenticeship standards to meet their needs.
As ACCA prepares to offer its own Level 4 Accountancy/Taxation Technician Apprenticeship to students aged 16+ in England, it has pledged to also support members in opening up more apprenticeship places.