Levy Paying Employers v Training Providers

Business Sense by The Leadership Team

The ‘big bang’ was due to happen on 1^st May 2017. Employers now paying into their digital account and in the absence of the expected apprenticeship contracts, business plans of training providers had a slow but steady build of Levy work through 2017. It didn’t happen.

Throughout the summer the talk was of September starts and employers mobilising their workforces into development plans and the levy would start to be utilised. There has been some activity but at this point – it hasn’t happened.

The effect on training providers has been harsh and there are many who have not made it to here and a huge number of others who will not make it through to Spring 2018 when we believe that significantly more employers will start to act.

To understand the reasons why, we need to think of it from the employer’s point of view.

1. There was a distinct lack of information and communication in advance of the Levy being introduced.
2. Most employers have had one or more bad experiences with training providers whose delivery/experience has been poor or they failed financially.
3. There is a general mistrust of training providers by employers.
4. The world of ESFA and Ofsted looks like a scary place from the outside and there is a distinct fear of the unknown – and who to trust?
5. The employers are busy doing their own business and do not see this as an urgent priority – they see a reasonably long time-frame in which to spend the Levy.
6. The employer has not hired new resources to deal with this, it has become an add-on to other people’s jobs – hence it does not get full attention.

Our experience of how (many) training providers see the situation is that they have not recognised that this is a commercial relationship, that there is a lot of competition out there, they need to provide a high-quality service/experience and at a fair, negotiated price. This is a world away from giving away free training.

We believe that the Employer should be at the centre of their own training and development and should in most cases become an employer provider. They can plan the architecture of the T&D and build certain sections of the delivery in house, bringing in external providers for niche, specialist or general delivery to gap fill their own programmes. The fact that less than 200 of 20,000 levy paying employers have accessed RoATP shows that they do not yet recognise the opportunity to take control of their own development and Levy pot.

For training providers, we do not see a successful outcome in being “all things to all people”. Trying to deliver everything to everyone is a recipe for failure. Focusing on what you are good at and doing it exceptionally well whilst collaborating with other partners to satisfy the needs of the employer is the way forward.

We see every reason to be very optimistic about 2018 as there is likely to be a big demand and a lack of supply. Those providers who are financially able to make it through into next year should be re-thinking their business and operating models to adapt to a very different world, but one which has enormous potential and much opportunity.

David Kitchen is Managing Director of the specialist FE Consulting firm The Leadership Team.