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Apprenticeships: The Apprenticeship Levy Celebrates Its First Birthday

16 May, 2018Karen Taylor

Female-professional-sitting-at-desk-in-conversationIn April, there was a very significant milestone in the apprenticeships world.  The apprenticeship levy – the major element of the apprenticeships reforms – was one-year old!  And what a year it’s been!

There has been great progress, albeit often slower and a little less straightforward than we might have liked.  Just like a tiny infant in its first twelve months, there have been the inevitable ‘teething issues’.  Yet, today, the Institute for Apprenticeships (IfA) is firmly established, having recently embarked on, what it calls, an ambitious change programme.  Listening to stakeholders who told the Institute it was taking too long to approve apprenticeship standards and that the process was over-complicated and opaque, the IfA has launched its ‘Faster and Better’ programme. We now have 256 apprenticeship standards across 15 occupational routes, with a further 276 standards currently in development and a monthly approval rate of around 15-20 standards.  That’s quite a pace!  Sir Gerry Berragan, the IfA’s Chief Executive, has compared the new apprenticeships regime to ‘building the aircraft whilst it is already in flight’.  An interesting, if rather scary, analogy which brings to mind perilous and unchartered territory with all the excitement of an as-yet unexplored and adrenaline-fuelled journey thrown in!

Apprenticeship numbers are falling… or are they?

One-year celebrations have, however, been somewhat muted.  Little surprise considering the criticism that has dogged the levy ever since it was introduced.  Headlines bemoaning the fall in apprenticeship starts continue, with latest Department for Education figures suggesting a drop, year on year, of between 22 and 25 per cent. But what doesn’t make the headlines is the fact that there has been a huge jump in degree apprenticeships, with an increase of 658 per cent overall from 2015/16 to 2017/18. This is extraordinary growth, indicating that the traditional perception of an apprenticeship being low-paid manual labour is finally starting to shift and opening up apprenticeships to a broader audience.  Furthermore, the Institute of Student Employers recently reported that its members are predicting a strong rise in the volumes of apprentices this year, with 33 per cent more apprenticeships expected to be offered in the banking sector alone.  It’s important to remember that employers have two years to spend their levy and many are wisely taking their time.  In financial services, for example, only 6 per cent of organisations planned to use their levy in Year One, compared to almost 70 per cent foreseeing a spend in Year Four.

Flexibility and collaboration… employers taking the lead

Another very positive development to coincide with the levy’s anniversary has been the decision, which takes effect this month, allowing levy-paying employers to transfer 10 per cent of their apprenticeship funds to one other employer to pay for apprenticeship training and assessment.  This is a massive step forward and counters widespread unrest since the reforms began around smaller organisations being unfairly excluded from offering apprenticeships.  The 10 per cent transfer heightens the flexibility in how companies utilise their levy funds and potentially cements ties and enhances collaboration between employers in the broader supply chain.  Without doubt, a further move towards putting employers firmly in the ‘driving seat’ when it comes to apprenticeships.

To find out more about our apprenticeships programmes in close collaboration with employers from across the financial services sector.