The Apprenticeship Levy may not be perfect – but apprenticeships are still vital

The Apprenticeship Levy is a government policy that provides funding for apprenticeships and lifelong learning. Businesses with a pay bill of over £3 million pay 0.5% of their total pay bill for the financial year into it. As policies go, it’s by no means perfect. But that shouldn’t stop businesses investing in their number one resource – their staff. 

As of March 2018, only 8% of the £1.39 billion paid into the Apprenticeship Levy scheme had been claimed. £1.28 billion was still sitting in business’ National Apprenticeship Service accounts – money that will be lost at a rate of £139 million per month come next April when the policy’s 24-month time limit on unclaimed funds kicks in.

Last month, the chancellor announced that the government would be making changes to the policy. This includes seeking feedback from businesses, a response to criticism that the policy wasn’t flexible enough. But the chancellor won’t be speaking to anyone until after 2020 and the government hasn’t named a date for any policy changes.


Use the Apprenticeship Levy or lose it

In the meantime, levy-paying businesses have a choice. They can pay in and ask for nothing in return. Or they can pay in and get something back. And for non-levy paying businesses, they can claim their apprenticeship contribution from the government or miss out altogether.

Yes, the apprenticeship levy might not be perfect. But an imperfect policy doesn’t negate how vital apprenticeships and lifelong learning are in modern business.

Let’s look at some of the positives of the levy

The limitations of the apprenticeship standards have been discussed at length. 20% off-the-job learning, evidencing and ‘functional skills’ training are all common gripes. There’s certainly room for improvement.

But let’s not discount the opportunities.

Company-specific cohorts

By creating company-specific cohorts, employers can bind teams together and help them embark on a collective development journey. This is great for team-building, employee engagement and retention.

It also helps make sure that the learning is applied in the workplace, as teams that train together are able to share ideas and discuss how they’ve applied what they’ve learned.

Creating a culture of lifelong learning

I was dismayed to see the news that apprenticeships have fallen by 31% this year. A policy that was designed to remedy a skills shortage and may have ended up contributing to it.

But I can’t help but feel that the 31% are guilty of throwing the baby away with the bathwater. An apprenticeship is not just a programme with a start and end date, it is part of your lifelong learning journey. And companies that help their people to realise their potential reap the rewards in terms of productivity, engagement and culture.

Seizing the advantage

The talent market is more competitive than ever, businesses are competing for the best talents in every sector. When I saw that apprenticeships had fallen by 31%, I saw the potential for businesses who are willing to invest in apprenticeships standards to seize the competitive advantage.

After all, who would you rather work for, a company that’s scaling back their investment in their people, or a company that’s supporting them and helping them grow?

Do your own research into the Apprenticeship Levy

Before you write off the Apprenticeship Levy, speak to a trusted training partner to make sure you’ve explored the possibilities. Every business has different needs. The press might have given it a bashing, but the levy could benefit your business in ways you’re not aware of.

As ever, it comes down to mindset. If you view it as just another tax on your business, then that’s what it will become. But if you view it as an opportunity to empower your people, bind together teams and embed a culture of lifelong learning, you may be pleasantly surprised.

If you have any questions or are looking for support on putting the Apprenticeship Levy to work for your business, you can contact me on LinkedIn.

For more insights from our consultancy team, check out this great piece from Marek on the difference between flexible and agile working. And to learn more about how to empower your people, fill out the form to the right (or below if you’re on mobile) to download a copy of our report, The Economy of People.

Ian Gregory

Leadership & Talent specialist at Ricoh UK & Ireland

Read all articles by Ian Gregory