From education to employment

Where do you sit in the debate, are you a modern day ‘Apprenticeship Leveller’?

Tony Allen, CEO AAS Ltd.

A new time for ‘The Levellers’?

The group of radicals during the English civil war known as The Levellers, were firmly of the view that man’s relationship with God was a personal relationship, neither needing nor requiring the intervention of priests.

This made me wonder about the current debate regarding apprenticeship funding, and to what extent there should be more intervention from government and its agencies, or whether it should be entirely up to ‘driving seat’ employers to decide how they spent their apprenticeship levy.

The term ‘level’ in this context of course has a double meaning, given that the arguments often centre of the extent to which employers should be allowed to spend their levy on higher ‘level’ apprenticeships, especially those in the management and leadership arena.

Where do you sit in the debate, are you a modern day ‘Apprenticeship Leveller’?

Ladder of opportunity

There are those, like the former Skills Minister, Robert Halfon, who believe that the apprenticeship levy should be spent on apprenticeships at all levels.

He argues passionately that apprenticeships represent a ‘ladder of opportunity’ to all employees, not just young people.

Levy funding running dry

The counter argument however, centres on the fact that we are told that we are going to run out of apprenticeship levy funding.

The reasons for this are complex, but one of them is that DfE underestimated the popularity of higher level management and leadership apprenticeships, the majority of which are funded at a much higher amount than lower levels.

So, put simply, the money has been spent by employers on training existing staff, at the expense of funding for lower level apprenticeships, which typically are aimed at young people.

Drop in entry level apprenticeships

It is true that the number of 16-18 year olds undertaking an apprenticeship are significantly down on pre-levy days.

Whilst this might partly be due to the profile of apprenticeship take up, the reasons for it are far more complex.

The 10% (now 5%) employer contribution for SME’s, and the rigid enforcement of the 20% OJT rule are bigger contributors to the reduction.

SME’s used to contribute over 80% of 16-18 apprentices.

The disincentives that were put in place for SMEs during the reforms have dramatically reduced this number.

Return on investment

In addition, the Levy has changed the motivation for employers to take on an apprentice. For large employers the driving force is now often (even if not publicly stated) how to recoup the levy.

I am increasingly asked to go and talk to groups of employers regarding how they can obtain and measure a real financial return on their levy contribution. 

Pre-levy, I was never asked about a return on investment, simply because it was not the employer’s investment. The funding for an apprentice came from some amorphous government pot, and the last thing on an employer’s mind was whether or not the government was getting a return on it!

However, given that we have a problem with the amount of levy funding available, the desire of government to restrict employer’s access to higher level apprenticeships will be firmly on the agenda!

So, what is the answer?

There are many possible ones in addition to the above including, tweaking the 0.5% or £3m payroll thresholds, introducing an employer contribution for all higher level apprenticeships, etc, etc.

One argument that has emerged is that 16-18 apprenticeships should be funded by the DfE, and not from the Levy. The argument goes that all other forms of education for this age group are paid for by the state, so why aren’t apprenticeships?

It is true that employers get the benefits from having a young person working for them, but then they are also saving the state a great deal of money in doing so.  

What is my view? Well I have to admit I am a true Leveller.

For me apprenticeships should be available to all irrespective of age or job. Providing that they are based on the need for new or enhanced learning, then I have no problem with employers deciding how they spend their levy.

I also believe that 16-18 year old apprentices should have their programme funded by the DfE and that it should not come from Levy funds. There should be funding parity with all other forms of education for this group.

Tony Allen, CEO, AAS Ltd

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