Apprenticeship levy: the skills minister answers your questions

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CIPD People Management article

In a matter of weeks, the apprenticeship levy – under which employers with a payroll of more than £3m will be required to pay 0.5 per cent to fund apprenticeships – will become a reality for UK organisations.

It’s a huge change for HR professionals to manage, both in terms of administration and the shift it will require in the provision of learning opportunities for all employees. People Management asked readers for their burning questions on the levy – and we put them to the man in charge, minister of state for skills Robert Halfon.

How does the government plan to ensure that the 20 per cent mandated off-the-job training under the new funding rules will be adhered to by employers and providers alike, to ensure that high-quality training that develops real skills is delivered?

Daniel Wells, operations director, NowSkills IT Apprenticeships

Quality lies at the heart of our apprenticeship reforms. To ensure a step change in apprenticeship numbers and quality, we have made sure the term ‘apprenticeships’ is protected. We have set out many times since the Richard Review in 2012 what our definition of an apprenticeship is and what we hope they should achieve. This makes it clear that an apprenticeship must include at least 20 per cent off-the-job training. By committing to the apprenticeship programme, an employer is aware that off-the-job training is required.
Our focus is always on quality, quality, quality. For example, we are also requiring independent final assessments of all apprenticeships to ensure standards are being met and employers gain the skills both they and their employee need.

What measures are built into the scheme to ensure it identifies employers that do not use the levy for the purpose intended?

Jean Harrison, director of organisational development and wellbeing, University of Westminster

Through the apprenticeship levy, we will be investing £2.5bn in apprenticeships by 2020 – double what was spent in 2010-11. So we really are putting money into apprenticeships to ensure they are the best they can be.

Employers that pay the apprenticeship levy will pay into the apprenticeship service. This is a digital account in which they can access their available funds and control how their funds are spent, ensuring they invest in the skills and training they need to get on. We have been working alongside employers in developing and testing the service to make sure it is responsive and easy to use.

We have also published funding rules and guidance that clearly set out that funds from the levy must only be used for activity directly related to an apprenticeship. Of course, if we do identify any misuse, we will take firm action.

What is the penalty for those in-scope public sector authorities that do not achieve the 2.3 per cent apprenticeship target?

Clive Mallon, service manager for organisational development, Somerset County Council 

We expect all organisations to strive to meet the target of 2.3 per cent and to take steps to take on more apprentices, but we do not want this to impact on quality. That is why we are making the target an average of 2.3 per cent starts across the years the target applies – from 2017-18 to 2020-21.

Annual information returns will provide an opportunity for organisations to explain any factors they feel have hindered their efforts to meet the target. Where appropriate, the Skills Funding Agency and Cabinet Office will work with public sector authorities to establish why they may have struggled to meet the target, how it can be prevented from happening again, and what further actions should be taken.

If we truly want our workforce to include apprentices, why didn’t you propose that 0.5 per cent of employees had to be apprentices?

Anon

We have some targets out there, including creating three million apprenticeships by 2020 and the 2.3 per cent target for public sector employers, but apprenticeships really should be demand-led.

I want to stress that it really is employers that truly know what skills they need for their workforce. That is why they are central to our apprenticeship reforms and are in control of what apprenticeships are on offer.

Groups of employers – or trailblazers – are involved in developing new apprenticeships, and that will ensure they and our economy are getting the skilled workforce they need.

CIPD research last June revealed that up to 40 per cent of employers had not planned their response to the levy. This suggests that extra support and encouragement is needed. Can the government consider allowing employers to use levy funds to pay for the additional support they need to get high-quality apprentice programmes in place?

Anthea Marris, HR consultant, Anthea Marris Consulting 

We have been working tirelessly with employers to make sure they are on track and ready for the levy, which starts in April. As I have already mentioned, we have consulted with employers throughout the process and published tools like the online calculator, which enables employers to understand how much levy they will pay and how they can use their digital funds. Employers will also have up to two years to use their funds.

We have been clear that fees charged by companies or individuals to manage an employer’s apprenticeship programme are not eligible. Apprenticeships are about giving people the chance to earn while they learn, and therefore we fund off-the-job training. If an employer feels that a managing agent adds value, they can continue to pay for this – but not with levy funds.

There are 500 new apprenticeship standards either ready or in development. Does the government have any idea how many standards there will end up being?

Simon Johnston, skills development manager, RSPCA

Apprenticeships are all about meeting the needs of our economy. That is why employers are in the driving seat. We have not specified the number of standards needed because that will depend on what employers feel they need.

We have been clear, though, that we will make sure every single apprenticeship created meets quality standards and adheres to the clear rules we have set out. We are committed to ensuring that there are three million quality apprenticeships by 2020.

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