Businesses have yet to get to grips with the biggest change to apprenticeships in living memory.
That was the verdict on the Apprenticeship Levy from leading HR and operational professionals in the utilities and construction sector at an Industry Skills Forum, which featured SGN, Siemens, Interserve, Skanska UK, Morrison Utility Services, FCC Environment, Develop Training Ltd (DTL) and Mentor Training Solutions.
The consensus among delegates at the event, co-organised by DTL and Mentor Training Solutions, is that many firms still don’t understand the levy. In some quarters it is widely viewed as a tax, in others managers are simply holding fire on making decisions about setting up apprenticeships given continued uncertainty.
Chris Wood, Chief Executive of DTL, which specialises in the utilities, energy and construction sector, said the forum raised important issues about the need for firms to recognise the implications of the levy and to respond appropriately: “This is a sea change in the world of apprenticeships, and businesses need help to navigate through it. Our role is not only to deliver apprenticeship training but also to advise clients on how to select and train coaches and mentors for their apprentices from among their existing workforce. For many businesses, that will be a crucial limiting factor in how many apprenticeships they can deliver.”
Firms have two years from their initial levy payments, which started in April this year, to draw down funds so many are taking their time before making a decision. However, the way the system is structured means that delay may mean they will be unable to recoup everything they pay into the levy.
Nevertheless, several delegates warned against rushing into setting up apprenticeships, which would typically cost more to operate than would be paid for by the levy. There is also the risk that recruitment standards could be compromised by a race to hire new apprentices.
Instead, firms should look at their business needs – both in recruitment of new apprentices and training of existing personnel – and set up apprenticeships to meet those needs.
Speaking at the event, Simon Yorke, technical adviser at City and Guilds, urged businesses to see the levy as an opportunity. It should be viewed as an investment, he said, and forecast that now that firms have to pay for apprenticeships themselves, they would demand a better return on that investment.
Steven Green, provider engagement manager at Energy and Utilities Independent Assessment Service, said that firms have to work hard to agree new standards for apprenticeships that are replacing existing framework agreements. He encouraged more businesses to get involved in the process.