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11 April 2017

Under fire apprenticeship levy is ‘not a numbers game’

This month’s launch of the Apprenticeship Levy has coincided with a critical report from the all-party parliamentary Education Committee, which dubbed it a “blunt instrument” that would do little to tackle the skills gap without significant changes.

This month’s launch of the Apprenticeship Levy has coincided with a critical report from the all-party parliamentary Education Committee, which dubbed it a “blunt instrument” that would do little to tackle the skills gap without significant changes.

The Committee said the Levy would drive up numbers of apprentices, but not necessarily in the industry sectors and regions where they were most needed.

It called on the Government to focus on “outcomes” and judge the success of apprenticeships by, for example, “whether individual apprentices secure employment” and consider restructuring the levy on a sectoral and regional basis – or even by individual employers.

One of the trade associations spearheading the development of apprenticeships in the built environment sector said it understood the Committee’s concerns, but said the Levy itself was not at fault.

“We have been stressing all along that this is not a numbers game,” said Tony Howard, director of training at the Building Engineering Services Association (BESA). “The focus of the funding needs to be on key industry sectors where there is not just a skills shortage, but where that shortage is likely to have the most impact on the economy. This includes many engineering professions where shortages and quality issues are hampering delivery of key building and infrastructure projects.”

However, he said the government could improve the system by allowing levy payers to pass on more than just 10% of their funds to their supply chains.

“Many major contractors have said they would happily invest in their supply chains by helping sub-contractors grow their skills base,” said Mr Howard. “So, we would urge the government not to curb their enthusiasm and be more generous with the amount they can pass on.”

The chair of the Education Committee, Neil Carmichael MP, said young people should be trained “for jobs that the economy needs”.

“Ministers must recognise that apprenticeships are a means to an end and not an end in themselves. They need to place greater emphasis on outcomes, focussing on areas of the economy where training is most needed and ensuring quantity does not trump quality.”

The UK Commission for Employment and Skills says there are now 209,500 ‘skilled’ vacancies across UK industry. This represents a 43% increase since 2013 and is in spite of apprenticeship starts rising to 509,400 in 2015-16.

Other government figures show that just 67% of apprenticeships were completed in 2015-16 prompting commentators to urge the Institute for Apprenticeships, which will oversee the new apprenticeship programme, to ensure courses are properly tailored to the needs of both the trainee and their employer.

BESA is working with building engineering employers to develop targeted ‘Trailblazer’ apprenticeships in key technical sectors including: installation; service & maintenance; heating and plumbing; ductwork; ventilation hygiene; refrigeration, air conditioning and heat pumps; and has also started work on developing apprenticeships at higher and degree level.

“Apprenticeships deliver real business benefits to employers,” said Mr Howard. “Research carried out by BESA’s training department has found that 83% of apprentices believe their career prospects have improved as a result of securing a place on an apprenticeship scheme.

“70% of employers say their productivity, and therefore business growth, is improved by taking on apprentices and every £1 of taxpayers’ money invested in apprenticeships at levels 2 and 3 pays back between £26 and £28 in long-term economic benefits,” added Mr Howard.

“The Levy system is new and it will take employers some time to get to grips with it, but it will play a vital role in addressing skills shortages. However, it depends on employers engaging with the process to ensure the training being developed is fit for purpose and meets their needs – particularly in technical professions.”


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