Workforce, Pensions and Training

26.02.18

Making the most of the apprenticeship levy

Source: PSE Feb/March 2018

Cllr Peter John OBE, deputy chair of London Councils and executive member for business, skills and Brexit, says greater flexibility and local control over the apprenticeship levy could be the difference between a policy that fails to deliver and a policy that transforms skills.

London boroughs take pride in fulfilling our role as leaders to create employment and training opportunities within our diverse communities. We have created over 11,000 apprenticeships and doubled the amount offered per year since 2009.

The apprenticeship levy, which was introduced in May 2017, presents a golden opportunity to build on the work already taking place in the capital.

It has the potential to boost apprentice numbers and ensure London contributes to the government’s ambitious target of achieving three million apprenticeship starts by 2020.

It is still too early to tell the extent of the levy’s impact on London businesses and boroughs. To develop our understanding of how it is working, London boroughs are keen to work with central government during the next financial year on a joint evidence-based review of the levy to closely examine its effectiveness.

In the meantime, initial statistics from the Department for Education show that there has been a sharp drop in the number of apprenticeship starts across the UK, which is a cause for concern.

Between May and July 2017 apprentice starts decreased by 59.3% compared to the same period the previous year, from 117,800 starts to 48,000.

An initial drop-off in the 2016-17 financial year was expected as employers get used to the apprenticeship levy. We know that SMEs in London borough supply chains are struggling to adjust and offer the training opportunities required to achieve the government’s bold aims.

Greater flexibility

London Councils’ view is that allowing employers more flexibility around the apprenticeship levy would go a long way in achieving more apprenticeship starts and better outcomes for Londoners.

Currently, the levy leaves councils with few tools to help with the particular demands for skills in the capital or addressing community-specific issues.

Greater flexibility could include allowing the levy to be spent on pre-apprenticeship training, which focuses on the most disengaged and furthest from the job market, getting those most in need ready to start an apprenticeship.

It could also be invested in supporting apprentices with additional needs, which would allow councils and businesses to improve attainment, progression and longer-term outcomes.

The proposed ‘passporting’ cap of 10%, to be introduced in 2018, limits councils’ ability to pass on apprenticeship levy funds to supply chain businesses keen to create apprenticeships. In 2016-17, London boroughs created 60% of their apprenticeships through contracts and suppliers.

Restricting ‘passporting’ to 10% will have real consequences when it comes to improving the supply of apprenticeships. It will also create additional barriers to addressing specific skills shortages in local government.

Devolving the levy

Given the likelihood of a significant amount of apprenticeship levy funding not being spent, London Councils is calling for the government to devolve unspent levy funds to London government as a first step.

This would help the boroughs and the mayor to closely support and work with businesses in the capital to generate more and better apprenticeship opportunities. 

In the longer term, London Councils is calling for full devolution of the apprenticeship levy to the capital, as already happens in Scotland and Wales, and for the government to consider broadening the policy’s remit to make it a wider skills levy.

Devolution will allow us to increase underrepresented group access, build capacity in SMEs, and better address gaps in apprenticeship standards.

The apprenticeship levy has the potential to ensure London remains economically strong yet grows in an inclusive way. However, the stark 59% drop in apprenticeship starts is an early sign that it might be not working for businesses or London boroughs.

We feel that additional flexibility, a broader remit and greater local control over the way levy funds are invested could make the difference between a policy that fails to deliver and a policy that transforms investment in skills in London and across the country.

(Top image © ivanastar)

 

FOR MORE INFORMATION
W: www.londoncouncils.gov.uk

Comments

There are no comments. Why not be the first?

Add your comment

 

related

public sector executive tv

more videos >

latest public sector news

Somerset council criticises financial resiliency index and media speculation on its finances

24/09/2018Somerset council criticises financial resiliency index and media speculation on its finances

Somerset County Council has expressed their concerns over the proposed financial resiliency index scheme, saying that “having a relative ra... more >
Edinburgh council plans out £30m cuts to tackle four-year £106m black hole

24/09/2018Edinburgh council plans out £30m cuts to tackle four-year £106m black hole

Edinburgh Council have announced a wave of consultations and set out their four-year plan to tackle their budget gap and growing strains on servi... more >
Cash-strapped Somerset council might still fail to set ‘sustainable budget’ despite massive cuts

24/09/2018Cash-strapped Somerset council might still fail to set ‘sustainable budget’ despite massive cuts

Somerset County Council might still fail to make sufficient savings to establish a “sustainable budget” even after the latest wave of... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >
Northamptonshire CC members vote in favour of unitary proposals

28/08/2018Northamptonshire CC members vote in favour of unitary proposals

Councillors at Northamptonshire County Council have voted in favour of proposals to create a unitary authority at its full council meeting today. The financially-struggling authority has had... more >
Northamptonshire report to propose splitting region into two unitaries

17/08/2018Northamptonshire report to propose splitting region into two unitaries

A report on the future of the debt-ridden Northamptonshire region due to be published this afternoon will likely recommend replacing all eight local authorities with two unitary councils. Pu... more >

the raven's daily blog

Social value: what is it and why?

14/09/2018Social value: what is it and why?

Ben Carpenter, chief executive of Social Value UK, discusses the worth of social value, and argues that, before we start measuring social value, we should ask clearly: what is it, and why? Social value is so much more than a value for money exercise. If you see social value as simply a new catchphrase for ‘efficiency savings’... more >
read more blog posts from 'the raven' >

comment

Crown Commercial Service: Travel solutions on track

10/09/2018Crown Commercial Service: Travel solutions on track

Katrina Williams, head of travel at the Crown Commercial Service (CCS), explains how they are helping government organisations to get the best de... more >
LEPs need to do more for England's countryside

10/09/2018LEPs need to do more for England's countryside

Paul Miner, head of strategic plans and devolution at the Campaign to Protect Rural England (CPRE), highlights the findings of a recent survey wh... more >
What about social care?

10/09/2018What about social care?

Cllr Izzi Seccombe, chairman of the LGA’s Community Wellbeing Board, looks at the exclusion of social care from the government’s rece... more >
Re-evaluating public service reforms

10/09/2018Re-evaluating public service reforms

Chris Painter, professor emeritus at Birmingham City University, explores the paradox of reform principles persisting despite mounting evidence a... more >

interviews

Michael King: Time for Ombudsman reform

06/08/2018Michael King: Time for Ombudsman reform

Michael King first joined the Local Government Ombudsman service back in 2004 as deputy ombudsman. At the start of 2017, he was appointed as the ... more >
Helping a city understand itself

06/08/2018Helping a city understand itself

SPONSORED INTERVIEW The urban landscape is changing. How can local authorities keep up with citizen behaviour? Stephen Leece, managing directo... more >
Modern policing: the future is bright

06/08/2018Modern policing: the future is bright

SPONSORED INTERVIEW The public sector, and policing in particular, has often been criticised as being slow to adapt to change. But now, says L... more >
Data at the heart of digital transformation

03/04/2018Data at the heart of digital transformation

SPONSORED INTERVIEW Grant Caley, UK & Ireland chief technologist at NetApp, speaks to PSE’s Luana Salles about the benefits of movin... more >

public sector focus

View all News