Petra Wilton reflects on the anniversary of the Apprenticeship Levy

An Anniversary of Apprenticeships.

As we celebrate the first anniversary of the new Apprenticeship Levy, it’s timely to use the occasion to celebrate what’s working whilst also reflecting on what more can be done.

Too often the clamour of critics against any major change in funding regimes, outweighs the good news stories.

Indeed, a recent survey of over 1,500 managers showed that support for the Apprenticeship Levy is strong, with two-thirds (63%) of managers agreeing that it’s needed to increase employer investment in skills.

And it is surely no surprise that across the board the numbers of new starts are down on previous years. It was always going to take both employers and providers time to adjust to such a transformational change in the funding landscape. Indeed, the Government recognised this early on by giving employers an extra year to spend their Levy pot.

It is also important to reflect that the new high-level trailblazer standards are very different to the previous apprenticeship frameworks, and require far more employer commitment to providing high quality work-based learning for the apprentices.

Despite a slow start, we’re aware that many businesses are rightly taking their time to ensure they get real benefits from investing in apprenticeships. They are selecting high-quality providers and aligning apprenticeship provision to the needs of their business. As a result, many new starts are expected in the year ahead.

CMI’s survey of employers ahead of National Apprenticeship Week, demonstrated how this demand is building. Many reported a very positive outlook, with 31% expecting to have more people starting new apprenticeship programmes over the coming year, compared to the period since April 2017. Nearly half (48%) of managers expect to see a rise in the number of new starts in the next 12 months.

The only real threat to this building demand across employers, is the potential for yet more policy and funding changes.

If employers are to invest in apprenticeships as a part of their long-term strategies for developing future talent and workforce capability, they need a strong and stable system, with certainty around the funding levels.

This particularly applies to the new degree apprenticeships where the costs are highest. Already employers and providers have invested considerable time, commitment and funds in developing and establishing these exciting new programmes. And from a standing start, the numbers are growing rapidly, especially across areas of key skills gaps, such as management, digital and engineering. Yet speculation of policy changes to funding bands could rapidly stall this early success and engagement.

At CMI we’re really proud to have led the development of the suite of management and leadership apprenticeships with over 50 employers of all sizes - including Serco, Civil Service Learning, Barclays, Pizza Hut, and SMEs. Already over 5,000 learners have started on the new trailblazer management apprenticeships across a fantastic range of providers.

This rise in the number and relevance of management apprenticeships shows that leading employers are recognising how best to drive growth.

As such, it is important that the Government now looks to simplify access to non-levy payers. Indeed, according to the Insolvency Service statistics, poor management skills is the key reason for the high failure rate of small businesses.

Yet too many employers, especially in smaller businesses, are not even aware that they can use the Levy to train managers and leaders at every level.

So scaling up numbers on the new standards may take longer than the initial flurry of uptake suggests. But apprenticeships will be a prize worth investing in and waiting for – if it means truly tackling our productivity puzzle and long term skills gaps.

Petra Wilton, Director of Strategy, CMI

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