New research shows that £3bn of Apprenticeship Levy funds are going unused, and suggests that if the rules were changed this surplus cash could be put to good use helping apprentice employers engage with schools.
The City & Guilds research report Flex for success?– published in January – showed that most employers are only using around 30-40% of the levy funding they’re entitled to. Only 5% of employers said they use 80-90% or 90-100%.
“Since its introduction in 2016 the levy is predicted to have generated somewhere between £2.2 and £2.6 billion of funding per year from approximately 50,000 companies in England,” writes Kirstie Donnelly MBE Managing Director, City & Guilds and ILM, in the report’s introduction.
“However, in the first year of its operation just 8% of the levy was estimated to have been spent. This figure has seemingly increased by the end of 2018 but without transparent reporting of apprenticeship levy spend, we are all left in the dark about the true extent to which employers have taken it up.”
This, according to the report, has led to frustration with the rigid rules about what employers can and cannot use levy funding for: a whopping 92% want to more flexibility around how they spend their levy funds.
Of these employers, almost 30% want to be able to use it for outreach/schools engagement. This is something we suggested way back in September 2018.
Anecdotal evidence in the report backs up this idea too.
“Pre-employment schools engagement has taken up so much of our time and resources,” one employer told City & Guilds. “There’s a massive amount of work in terms of how you engage schools (parents, teachers etc). There’s a lot of time, money and resource spent and I think the levy could be spent on some of that.”
“Our apprenticeship start numbers stayed static for the last year,” said another. “But we have seen most employers now use their levy on higher degrees and upskilling the current workforce rather than bringing young people into the workforce.
“We would like greater flexibility in the way we are able to invest our levy so we can focus on attracting a younger demographic of workers, particularly to allow us to engage with Higher Education and Further Education as well as allowing us to reach out to schools and get involved in the T Levels / traineeships agenda.”
Tune in to #SkillsWorld on FE News to hear Kirstie Donnelly and Tom Bewick discussing what a more flexible Levy could, and should be spent on.
Anthony Impey, Federation of Small Businesses, told City & Guilds greater flexibility would be especially helpful to smaller employers when it comes to recruiting school leaver aged apprentices, especially when it comes to competing with more well-known, embedded options such as university via UCAS.
“SMEs in some sectors simply can’t fill entry level roles,” Anthony explained. “Fewer candidates being available is a key challenge; there are fewer 18 year olds in the population; the levy has meant that there are more big brand employers recruiting from this already small pool; and, the university application process (via UCAS) is also easier to understand and access.”
Using Levy Funding For School Engagement
One of the report’s recommendations also backed up the argument that levy funding could (and should) be used for school engagement: “Government, working with employers and training providers should look to broaden the appeal of apprenticeships, through promoting the benefits to parents and teachers, investing more time in outreach with local schools and colleges.
“This would include putting clearer progression pathways in place to allow would-be apprentices to understand the longer-term career progression opportunities from undertaking an apprenticeship.”
Our own research shows that this outreach and engagement is needed: classroom teachers are frequently asked to provide students with careers advice, despite not being trained specifically to do so. Over a quarter of teachers are asked about careers advice from students on most days.
Despite being approached by both students and parents (during events like parent’s evenings), subject teachers display a knowledge gap when it comes to school leaver options. While nearly all of them (97%) know about university options, less than half are aware of apprenticeships, school leaver programmes and work shadowing schemes. Employer engagement could help close that knowledge gap.
Teachers also want to be better informed: over 80% of them say that they wish they knew more about options for their pupils. We also know that careers advisers in schools want to hear from employers.
Engaging with schools is also expensive and time-consuming. Employers surveyed in 2018 by AllAboutSchoolLeavers said they made an average of 33 school visits per year, at a cost of £192 per visit. The same research shows that it takes employers an average of over eight hours 30 minutes to build a relationship with a school: multiple visits are required to build a real partnership. This is costly for employers – the ability to draw down from levy funding to cover costs of school engagement could make it easier.
For pupils themselves, too, engagement is key. It improves knowledge around options other than university, as well as providing more general advantages: we know from the Gatsby Benchmarks (specifically, Gatsby Benchmark 5) that meaningful engagement with professionals outside school is essential to increasing the employability of young people.
Let’s hope the government takes on board what both employers and schools are asking for: the flexibility to engage properly with each other.
Emma Finamore, Editor, AllAboutSchoolLeavers.co.uk