Workforce, Pensions and Training

23.04.18

Apprenticeship levy: retrain without pain?

Source: PSE April/May 2018

Tom Stannard, deputy spokesperson for economic prosperity and housing at Solace, considers the future potential of the apprenticeship levy a year into its creation.

The apprenticeship levy, which came into force in April 2017, is part of the government’s wider commitment to increase the quantity and quality of apprenticeships in an attempt to create three million apprenticeship starts by 2020.

The rationale for the levy is well rehearsed, with numerous reasons for committing to improving the stance on apprenticeship starts to include changing the perception of vocational pathways, encouraging greater inclusivity and take-up of the apprenticeship pathway, allowing apprenticeships to support the economic growth and goals of businesses by bridging any potential skill gaps of firms, and supporting productivity – which will be vital in the post-Brexit economy, with a focus on new recruits.

However, this focus is perhaps too narrow. The recently-published Industrial and Careers strategies recognise a wider issue of skills-based productivity, especially in areas where there has been significant changes in business demography.

In Oldham, manufacturing was the biggest sector, but has lost 50% of the jobs (c. 10,000) with growth in the financial & business sector and health and social care, which highlights the need for support for career changers as well as new entrants.

This economic restructuring has also changed how recruitment operates, with a significant increase in short-term employment creating an environment whereby the levy will have limited impact on individual skills levels, and specifically the creation of new apprenticeship roles.

In a post-recession, pre-Brexit economy, the question is how ready is the business community to take up the challenge set out in the Industrial Strategy?

How do we support those for whom their work future is disconnected from their work history?

Greater support needed

The recent Greater Manchester Business Survey shows that whilst 60% of companies invested in staff training, of the 39% that undertook no training last year in Oldham, 34% have no training budget – with around only one in 10 employing apprentices.

This suggests that the levy, on its own, will not increase the skills performance needed. A majority of local companies do not pay into the levy and too little has been done to promote the co-investment route.

For citizens, the Advanced Learner Loans route is useful, but requires a sense of self belief and confidence often missing from those we meet who have lost work in a major industry and see nothing but entry-level employment in different sectors as being suitable for them. Can the levy work to support career changers?

It is clear that the levy can play a major role to support business productivity and citizen reskilling, but it requires greater business engagement and support – and the question remains as to whether an apprentice levy is too narrow a pathway, with too many restrictions.

The National Retraining Scheme has the potential to close this policy gap, but it must fit across the ideas and ‘business environment pillars’ of the Industrial Strategy.

Benefit of devolution

On a positive note, whilst the levy has been a time-intensive programme for most councils – from unpicking the levy attributed to council-aligned but not managed agencies (e.g. schools) to balancing the use of the apprenticeship pathway for new recruits as well as existing staff, to ensuring procurement procedures are compliant – it has supported closer working across the devolved public sectors.

In Greater Manchester, the combined authority has developed a partnership hub which has provided a great forum for sharing information and good practice, as well as offering some collective salvation (especially in terms of procurement).

This hub enables the public sector to take stock on how the levy will support key groups, specifically BAME and older citizens.

Early analysis demonstrates an issue about the value of apprenticeships within BAME communities as “not worthy career paths for young people; young people on apprenticeships aren’t as ‘smart’ as those taking a traditional degree.”

In GM, the hub will now focus on how we can begin to communicate how apprenticeships are worthy alternative routes to further/higher education now that the types and levels of apprenticeships offered have developed, and now they are available up to a degree level or even worthy to start careers through.

Nearly a year into the levy and the sector is adopting the programme, making plans for the expenditure, creating new roles, and upskilling existing staff. This is what the public sector does.

However, we also have an eye on how these reforms can support our citizens and business communities.

Feedback from both communities shows that in some cases the jury has yet to be appointed, never mind is “out.”

It is clear that we need a wider response, especially for SMEs and the citizens that find themselves needing to retrain. Perhaps the Industrial Strategy, supported by the Careers Strategy, can support this ambition?

 

FOR MORE INFORMATION
W: www.solace.org.uk

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