Opportunity knocks for training providers with the announcement of the Apprentice Levy

An exciting opportunity presents itself next year for Learning and Development providers, in the shape of the UK Government's announcement of the Apprenticeship Levy, bringing further expansion and funding of the already successful and popular apprentices scheme. With cross party support, it is likely that further development of the apprentice scheme will follow, in the government's ongoing attempts to bridge the UK's productivity gap. A significant factor in the productivity gap, an ongoing issue currently running at 20% below the rest of the G7, is the low skills level in the UK's workforce. As a consequence, we are faced with an increasing demand for Learning and Development, and an essential 'upskilling' of the workforce in the coming years.

The levy will be seen by many as a game changer in the world of apprentice training, giving an incentive to all employers to address their training provision across existing apprentice programmes, professional qualifications, graduate schemes and professional development, and to look at how those programmes might be integrated into apprentice schemes, to maximise the impact of contributing to this new ring fenced levy fund. By taking a lead from countries such as Denmark and France, the levy puts investment in apprenticeships on a more long-term, sustainable and level standing, and will boost benefits for the economy, employers and apprentices alike.

The recent publication of the English Apprentices: Our 2020 Vision survey report, highlights that a healthy 83% of apprentices said their career prospects had improved, and that they feel better equipped. Similar positive thoughts came from employers, with 70% of those surveyed reporting an improvement in service and product quality. Through increased productivity and improved profitability, the cost of apprentice training is covered within a couple of years from completion. And with apprenticeships returning a typical return of £26-£28 for every £1 of government investment, the benefits to the economy are clear and current. Further governmental investment can only serve to strengthen those benefits.

From April 2017, some companies will be expected to contribute to the scheme via a new apprentice levy, and further changes will be made to the funding available for apprenticeship training for all employers. All organisations operating in the UK, liable to pay Class 1 National Insurance contributions and with an annual wage bill in excess of £3 million, will have to contribute to apprenticeships, but will also see benefits from being able to train apprentices. The levy will be charged at a rate of 0.5% of an employer’s pay bill, with each employer receiving a levy allowance of £15,000 to offset against their levy payment. Hence the levy only applying to businesses with the £3 million annual wage bill. This means that, while every organisation qualifies for the £15,000 allowance, only 2% of companies will be required to contribute to the fund. The levy allowance itself can be used for training either existing or new staff, or to assist employees seeking promotion.

The digital apprentice service, already in place, will remain available for businesses, regardless of their liability to paying the levy, and enables companies to select an appropriate training framework, select their preferred training provider, post apprenticeship vacancies, and to select an assessment organisation. The government expects that the levy will increase apprenticeship spending to £3 billion by 2019-20, with approximately £25 billion being spent in England alone.

As the intention behind the levy is that the government will meet its target of 3 million apprentice starts by 2020, this extra funding will allow organisations in both the private and public sectors to strategically plan for their workforce over the coming years.

The palette for apprenticeships, already broad, is set to broaden further with the introduction of the levy. It is available to both public and private sector organisations, a variety of age groups, and to employees at all levels from new staff to more established staff planning their future. Employers can only ever benefit further from this new initiative.

Learning and development providers have a fresh opportunity to provide further support for organisations participating in the apprentice scheme, both currently and as a result of the new levy.

The English Apprentices: 2020 Vision further highlights five areas for improvement of the scheme. Learning and Development providers can address these improvements through digital learning systems.

An emphasis on quality and rigour

Online and e-learning solutions can bring enhancements to the quality of training, through flexibility, ease of access and cost effectiveness, as well as providing more focussed monitoring and support through more efficient use of data.

Training that is trusted and transferable

For employers and employees alike, the benefits of digital learning platforms provide, again, flexible and adaptable learning, focussed and aligned to the long term goals and objectives of both the organisation and the individual.

Relationship of employer and apprentice is at the core

An essential requirement, transparency for both parties, and easier collaboration towards the end goal being another benefit of e-learning methods.

Employers at the heart of apprenticeship design and delivery

Putting the design of the training, and its assessment and monitoring in the hands of the employer both increases the apprentices' chances of achieving their learning targets and gives the employer better control. Learning and Development providers using digital systems are able to provide tailored and targeted solutions, in collaboration with the employer.

A focus on what the apprentice can do at the end of the apprenticeship

Its all in the design of the training, focussed and aligned to the companies long term business objectives, and targeted to foster an increased interest in learning from the apprentice.

 Clearly, with the average entry level age group for apprenticeships ranging from 16 year old school leavers to post-graduates, all 'digital natives' of the new transient, global and connected world and companies who utilise technological solutions to Learning and Development will benefit further. We know that fully integrated mobile learning solutions, aligning tech based learning with corporate and individuals' objectives, to build upon the existing technical abilities of this demographic, as well as giving companies faster, more cost effective platforms of training and development.

With this new investment comes an undeniable opportunity for providers, employers, and apprentices as well as long term improvements for the economy through improved productivity. Opportunity knocks.