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The levy 1 year on... a mixed bag of Investment, Delays but with Potential.

Every provider in the country started April 2017 with enthusiasm and the expectation of employers enrolling significant numbers of Apprentices to spend their levy. As we know, it hasn’t quite happened like that, with over 8,000 employers still to even register on DAS some 12 months on, and many employers having spent less than 15% of their first year levy, a year on.

Certainly if you haven’t spent at least 30% of your first year levy by now, the chances of you having to pay back money in May 2019 are becoming increasingly likely.

There will be some mad panics going on later in the year as FDs, in particular, have to explain that money is being taken back by HMRC, particularly in the public sector, where there will be political implications of this happening.

But despite the delays, which are both frustrating and expensive given the amount of time invested by ourselves and other providers, there are some spring shoots emerging of clients having reflected this past year and now really starting to look at the levy as an opportunity to strategically plan their L&D offering. We have developed a menu for some clients, analysing all their operating division needs and mapping this to job roles and standards. It has developed into an online portal, enabling them to ‘plug and play’ on levy requirements. This has generated in the past 3 weeks, over 800 opportunities with this one employer.

There is much greater talk and organisations commissioning ‘lead providers’ to run all of their levy. We advocated this some 18 months ago and we are seeing real traction with lots of employers seeing the cost and strategic benefits of going down this path, utilising the power of the providers and their knowledge.

Unfortunately, we have also started to see some new providers falling by the wayside. The recent Ofsted report of Key6 is a salutary lesson for all new providers and employers engaging those who may be on RoATP, but have no real track record in the market. We have already been asked by some employers to take on provision – what we are finding is truly shocking but it does beg the question on how employers could have engaged and put their faith in providers with absolutely no real track record – a training organisation who has traditionally delivered commercially is not the same as delivering apprenticeships in this new levy world.

But there is huge potential and we are seeing the tide turning. We look forward to year 2 with great enthusiasm. Our client service review mechanism is in full swing now and we have many new clients who we are working with, as well as implementing the strategies for our existing clients.

Finally, 2018 will see the formation of more formal partnerships in the sector, providers working more closely together both from the commercial training sector and the existing apprenticeship providers to strengthen the offer to employers and enable the lead provider relationships to really take hold. An MSP in HR outsourcing speak will emerge and we are determined to be leading the field – watch this space!

Finally, for our clients, a few things to consider:

  • modelling your spend – we have the tools so talk to your account manager.
  • accounting for underspends in your accounts – have a think about this!
  • get your strategic plans together and your ‘menu’ of options.
  • it’s time to review the performance of your providers and see if they are really delivering for you.

Think lead provider, it really is the future for the success of the levy and is the most cost effective and efficient way of working.

Peter Marples, Group Chief Operating Officer, 3aaa Apprenticeships

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