Businesses that pay the Apprenticeship Levy are being urged to use their funds to upskill their own workforce, take on new apprentices, or help other organisations to do so. Under new arrangements now in place, levy-payers can share training funds with any non-levy payer including smaller businesses within their supply chain or even within their local community.
Katy Urwin, director for apprenticeships at North Warwickshire and South Leicestershire College said, “We know that apprenticeship starts have taken a hit since the introduction of the Apprenticeship Levy which is paid by large organisations with a turnover of £3M or more. It is imperative that businesses do not lose the opportunity to spend the levy on training an apprentice or upskilling their existing workforce. The levy works on the basis of ‘use it or lose it’ and if it is not spent, that money is subsumed into general taxation, meaning that the workforce will lose out on opportunities to improve their careers, and UK productivity targets will not be met.
“Earlier this year, the Government opened up the levy transfer scheme which enables levy-payers to move their training funds into the accounts of smaller organisations within their supply chain. We’re asking organisations to take a broad view on this. Any improvement in skills within their overall network is bound to benefit their business in the long run.
“The levy transfer scheme also represents a chance for businesses to make a mark in terms of corporate social responsibility. They should take a look around their local community and think about whether the business next door could do with some assistance. Or perhaps there is an organisation or establishment that is depended upon by their workforce whom they could help? That could be the local hairdresser, the pub or restaurant where the team has Christmas lunch, or a local sports club or gym.
“This money is being ring-fenced by the Government to train a nation and it is a great pity that some funds are being re-directed through lack of use.
“SMEs need to be particularly mindful of the funding regime when considering taking on an apprentice. The College is only able to support a finite number through its own funding allocation. Once this has been spent, small and medium-sized businesses will need to find levy-payers to support their training, or appeal to the College to help them locate a partner.
“Anecdotally, we have heard levy-payers say that they aren’t familiar with the process of spending their training budget. With the inside track as a levy-payer ourselves, as well as being an apprenticeship training provider, the College is in a great position to advise on the process, including showing levy-payers how to pass on their training funds to others. In fact, we are bucking the national trend and our apprenticeship starts are up year on year. We are using our funds to train a high number of staff in marketing, finance, sport, management and teaching through the new apprenticeship standards that are designed by, and for, employers.
“We are proud to be working with a number of levy-paying organisations within the manufacturing sector including Penta Patterns of Hinckley who produce composite and carbon fibre moulds, patterns and parts for aerospace and automotive markets. They have made a strong commitment to investing in apprentices and are benefiting from ‘growing their own’ talent pool. We are also working with Toyota and Jungheinrich at a national level keeping their teams supplied with apprentices whom they know will form the basis of their future workforce.
“Our ambition is for large businesses and other organisations to take their responsibilities to train seriously and make a concerted effort to ensure that skills budgets are spent appropriately. Everybody benefits from a skilled workforce and investing in training will be the key to the UK’s future success after we leave the EU.”
The College is keen to hear from levy-payers who have not yet used their funds and is happy to advise any business on the best way to upskill their team.
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