Four years on: Apprenticeship levy – success or failure?

In April 2017, the government launched the Apprenticeship Levy, a fund to support new apprenticeships, which requires employers with a pay bill over £3 million each year to pay a levy charged at a rate of 0.5%. Four years on, some success, some confusion and a pandemic later, what impact has the Levy had on the higher education sector and the thousands of businesses it was designed to support?

How employers recruit and train talented people, how to improve productivity, and how to maintain a workforce which is fit for the future, keeping people motivated and encouraging the broad development of skills and attributes, have been questions educators, industry, politicians and individuals alike have been grappling with for years. 

The Levy initially posed an opportunity for larger employers to explore apprenticeships as an option for their businesses and provided the means to fund it. But on launching, the tax benefits were outweighed by confusion about how to use it. Robin Webber Jones, Head of Apprenticeships at the University of Derby, has followed the Levy since it was established and can offer some insight on its evolution.

Enter the Levy

“Following the financial crash in 2008, the disparity between the way the UK approached resolving some issues compared to international counterparts was apparent through the rate of economic improvement that happened in the bounce-back,” says Robin. “One of the tools that was used was the introduction of the Apprenticeship Levy – a scheme for employers of a certain size and/or turnover to access learning. 

“The learning was to take the form of a revised set of Standards, devised by industry from all sectors against knowledge, skills and behaviours, which also focused on the occupational competency, qualifications needed and professional body recognition. 

“There has been a great deal of national press about apprenticeship start targets not being hit, however, further reforms have taken place during the Levy’s lifetime to allow smaller and medium sized employers to train and develop the workforce. The Levy can be used in the supply chain by passing the funding from larger organisations to their suppliers, which has resulted in more employers wanting to engage with the apprenticeship agenda.

“Broader skills reforms, such as the proposed new Lifelong Learning Entitlement, T-Levels for 16-18 year olds, the National Skills Fund to re-train adults in priority sectors, and the launch of Higher Level Technical Qualifications are all providing, or will provide, routes for universities to work with employers to co-construct a curriculum which benefits all learners – from apprentices, to full time undergraduates, and those in post graduate study.”

Robin Webber Jones

There has been a great deal of national press about apprenticeship start targets not being hit, however, further reforms have taken place during the Levy’s lifetime to allow smaller and medium sized employers to train and develop the workforce.

Robin Webber Jones
Head of Apprenticeships at the University of Derby

Change is as good as a rest

Changes and tweaks made, the Levy appears to offer strong benefits for embedding the new skills and growing talent needed within the workplace. It combines practical on-the-job training with academic learning relevant to the specific needs of the business or role. But is this the case in reality?

“Absolutely,” adds Robin. “The University of Derby has always been committed to excellence in the skills arena, supporting social mobility and how people access learning as a life-fulfilling and enhancing tool, and so was one of the first Higher Education Institutions to offer higher and degree apprenticeships. 

“Now there are over 100 employers and 1,700 apprentices on these apprenticeships. Through Buxton and Leek College, our Further Education provision, there are over 250 level 2 and level 3 apprentices. This significant work is with some of the largest employers in the region, with partnerships in health, engineering, logistics, transport and many more key sectors.”

And what about on a national scale? Are apprenticeships really making an impact? Mandy Crawford-Lee, Director of Policy and Operations at the University Vocational Awards Council (UVAC), believes so.

“Apprenticeships are a success story,” says Mandy. “Under the government reforms, they have been developed and are being used to train individuals in key public sector occupations; nursing, policing and social work. In the private sector, apprenticeships are being used to tackle skills gaps and shortages in engineering and digital occupations. The proportion of lower level apprenticeships in questionable occupations has significantly declined.

“Apprenticeships has emerged as an aspirational programme and not the good choice for other people’s children – the description often given to them in the past. In some occupations, apprenticeships are acting as the key tool to diversify recruitment. 

“The Police Constable Degree Apprenticeship is, for example, helping to substantially increase the recruitment of women and BAME applicants. Progression routes are being strengthened in many professions through the use of apprenticeships; the Nursing Associate and Registered Nurse Apprenticeships being good examples.”

Mandy Crawford Lee

Apprenticeships are a success story...they have been developed and are being used to train individuals in key public sector occupations; nursing, policing and social work. In the private sector, apprenticeships are being used to tackle skills gaps.

Mandy Crawford-Lee
Director of Policy and Operations at the University Vocational Awards Council

The Covid effect and building back

No review of an initiative spanning the pandemic can be truly evaluated without addressing what impact Covid-19 has had. As with most business practices, ways of working and restrictions, apprenticeships were affected.

“It is fair to say that the pandemic did have an impact nationally on apprenticeships,” continues Robin. “Some industries were not able to recruit, some had to furlough staff, and some had to recruit more. 

“To successfully undertake an apprenticeship there has to be a mixture of on the job and off the job training and this should work seamlessly. While great strides were taken nationally, and in the University, to ensure the highest quality online learning during the pandemic, the range of challenges we all faced individually meant that keeping going was not always straight forward. 

“Through this time, although the University grew the number of apprentices it had by responding to the needs of employers, this was not necessarily the case nationally. By supporting training in key sectors, the University was able to continue to play its part in training the workforce of today and tomorrow.”

Apprenticeships have overcome the challenges of the pandemic. Could they now be part of the solution to helping the UK build back better and supporting the levelling up agenda?

Robin adds: “Apprenticeships are ideally placed to help business embed the skills needed to build back from the pandemic. We are working with sector partners such as UVAC and FACE to be able to explore ways of widening access for Higher and Degree apprenticeships and continuing its research into technical vocational training that is focused on impact in policy making and for practitioners.”

Written by Gemma Bradley

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If on-the-job learning appeals to you, an apprenticeship could be a good choice. If you are an employer, apprenticeships can be a really cost-effective way to develop your workforce.

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