One of the innovations in organizational learning and development promised by the UK’s apprenticeship levy scheme, which came into effect last year, was that it would enable employers to apply the apprenticeship model to professional and managerial roles in addition to its traditional use in skilled trades. As of last October, however, official figures showed that only half of companies eligible for levy funds were using them, and often on training programs other than apprenticeships, such as sending their executives to earn MBAs.
Personnel Today’s Rob Moss highlights some new research from ILM that investigates how HR decision makers in the UK are applying their training budgets, which turned up one possible reason why few organizations are approaching management training through apprenticeships: 58 percent of respondents said middle and senior managers would be unwilling to be seen as an apprentice due to the “reputation and image” of apprenticeships and the implication that they require additional support:
Professionals’ reluctance to be seen as an apprentice could be putting businesses at a significant disadvantage. Of those surveyed who currently run a formal leadership training programme to help fill middle and senior management or leadership roles, over two thirds (70%) aim their programmes at mid-level employees. Yet only a quarter (25%) would consider using apprenticeships to improve the skills of middle managers, and 21% would consider using them to develop senior managers.
The number of apprenticeships begun in the first quarter of the current academic year in the UK fell by 26.5 percent over the same quarter last year Ashleigh Wight reports at Personnel Today, reflecting the disruption that has been ongoing as employers adjust to the controversial apprenticeship levy introduced last April:
The Department for Education (DfE) said that 114,400 people began an apprenticeship in the first quarter of 2017/18, which was down from 115,600 for the same period last year. The DfE suggested that the introduction of the levy would have an effect on apprenticeship take-up as the new approach beds in. A total of 67,200 levy-supported apprenticeships have begun so far, of which 41,600 started in the first part of 2017/18.
Supporters of the levy say these anticipated declines are merely growing pains and that apprenticeships will bounce back as employers become familiar with the law. Critics, however, say the new system is unworkable for many employers:
Seamus Nevin, head of policy research at the Institute of Directors (IoD), said the new system had failed to take off as it was difficult to navigate. He said: “Apprenticeships are a fantastic type of training for someone new to a job – and it is great to see there was an increase in the number of higher level apprenticeships this year – but employers have made it clear that this type of training is not always the most appropriate way of helping to up-skill someone already in work.” …
The number of people starting apprenticeships in England declined by 59 percent in the final quarter of the academic year, May–July 2017, to 48,000 from 117,800 in the same quarter of last year, Rob Moss reports at Personnel Today based on new figures from the UK Department for Education. While not unexpected, the decline underlines the rocky start that has befallen the UK government’s controversial apprenticeship levy scheme, which went into effect in April. Both union and industry leaders suggest to Moss that the levy has been making apprenticeships more difficult to organize:
In the lowest level training schemes, intermediate apprenticeships, the number of starts fell by 75%. Tony Burke, assistant general secretary at Unite, said the trade union had concerns about the lowest grade of apprenticeships and whether these were beneficial. He added that there was “a great deal of frustration” with the new scheme. “Some businesses view this as a disaster. The levy has made things more complex so they are not taking apprentices on,” Burke said.
Only about half of the companies eligible to use funds from the UK’s apprentice levy, which came into effect this April, to pay for training programs have taken advantage of this option, the latest official figures show. And this is raising concerns that businesses may be “writing off the apprenticeship levy as a tax,” Emily Burt writes for People Management:
Just 10,500 apprenticeship service accounts were registered on the system at the end of August, according to the official figures, falling short of the estimated 19,150 levy-paying companies eligible to use the service. …
Elizabeth Crowley, skills adviser at the CIPD, said the government must do more to make sure employers were actively engaging with the levy: “In our view the government needs to be doing more work to ensure employers are making a choice in not using the levy, instead of being unaware of it. It is equally important that if there is an underspend, the funds are ring-fenced and used for supporting employer training, as there is a danger it could simply go back into the government’s coffer, and not be used to increase skills training and investment in the UK economy.”
Among those organizations that are using apprenticeship levy funds, many are using them in unexpected ways.
The UK’s controversial apprenticeship levy, which came into effect on April 6, has been widely criticized by some employers and business groups as a fundamentally flawed, albeit well-intentioned, plan for developing the domestic workforce. The scheme proposes to fund 3 million places for apprentices throughout the UK by taxing organizations with annual payrolls of over £3 million, but its critics say it is unlikely to work as advertised. As a new report makes clear, one reason for that skepticism is that the definition of “apprenticeships” eligible for funding under the levy is insufficiently flexible, Marianne Calnan reports at People Management:
The Association of Employment and Learning Providers (AELP), which represents those who deliver training to apprentices, said the requirement for 20 per cent of apprentices’ training to take place ‘off the job’ was insufficiently flexible for employers. It found that just 13 per cent of training was currently delivered off-the-job, and said employers that were new to apprenticeships felt losing an apprentice for an average of a day each week would restrict the number of apprenticeships they were prepared to offer. …
The UK apprenticeship levy, scheduled to go into effect in April, is intended to create job opportunities for young people and close skills gaps in the national labor market by funding 3 million places for apprentices throughout the country. Critics of the levy have argued, however, that the levy will only encourage employers to rebrand existing graduate recruiting and training programs as apprenticeships. A new survey of employers finds that most organizations plan to do just that, Marianne Calnan reports at People Management:
BPP Professional Education’s poll of leading organisations – most of them in the engineering, financial services, law and accountancy sectors – found that 53 per cent were in the process of switching graduates into apprenticeships to ensure they can reclaim the payroll tax that funds the levy, and benefit from additional government financial support. But the move, if replicated more widely, raises questions about whether the levy will achieve its aim of opening new routes into the workforce for those who opt not to go to university, and whether it is being misused to rebadge existing training and development schemes rather than create new apprenticeships.
At the same time, Jo Faragher at Personnel Today passes along another potentially troubling survey by City & Guilds, a vocational education organization, finding that many employers who will be responsible for paying the levy “are not even aware of its existence,” while others don’t know what funds from the levy can be used for:
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The UK’s controversial apprenticeship levy, which is due to go into effect this April, will require all employers with an annual payroll of £3 million or more to pay 0.5 percent of their payroll toward a scheme intended to fund 3 million places for apprentices throughout England, Scotland, Wales and Northern Ireland. However, an analysis released last week by the Institute of Fiscal Studies indicates that most of the funds raised by the levy won’t actually be spent on apprenticeships, Rob Moss reports at Personnel Today:
The apprenticeship levy … is estimated to raise £2.8 billion in 2019-20. To compensate, employers training apprentices will receive more generous subsidies. However, the IFS has said that government spending on apprenticeships in England is only expected to increase by £640 million between 2016-17 and 2019-20, so most of the revenue raised will be spent elsewhere. Furthermore, the nature of the funding system means there is a “risk that the apprentice ‘brand’ is becoming just another term for training”.
The report stresses the need for “an effective system for supporting training of young people in the UK” but argues that the apprenticeship levy would “risk repeating the mistakes of recent decades by encouraging employers and training providers to relabel current activity and seek subsidy rather than seek the best training.” For that reason, Annie Makoff highlights at the CIPD’s People Management, employment experts are pointing to the study as proof that the levy promises a low ROI: