Apprenticeship Levy- Use it or lose it

Why I’m astonished that companies aren’t better prepared for the Apprenticeship Levy

A lot can change in two years. When the Apprenticeship Levy was first announced back in the summer budget of 2015, David Cameron was just starting a second term as Prime Minster, a date for the EU referendum hadn’t even been set, and the bookmakers’ were giving odds that Donald Trump would be President of the United States of more than 50:1.

For a long time, the Apprenticeship Levy has felt like a very distant prospect to many businesses, something to think about at some point way in the future, rather than now.

Tomorrow, that distant prospect will come into sharp focus, as the Levy finally comes into effect and businesses start having to pay their first monthly contributions. 

Set at 0.5% of payroll for UK employers with a payroll of more than ￡3 million per year, the Levy is a very significant sum of money for any business to have to pay. If you don’t make use of your contribution to invest in training, it effectively becomes an additional tax.

And yet, astonishingly, it seems many businesses have given little thought to how they plan to use their Levy funds. Recent research published by City & Guilds has found that a third of businesses are either confused or even unaware of the financial implications of the Levy, while only 31 percent of respondents plan to use the Levy to increase their number of Apprentices. I find it very surprising that more companies aren’t seizing this opportunity to enhance the skillset and capability of their workforce.

At Serco, we’ve been planning for the introduction of the Levy for some time. We have always been a great supporter of Apprenticeships and we really value the contribution they have made to our business.

So we see the Levy as an opportunity to invest even more heavily in learning and development, by creating hundreds more Apprenticeship opportunities. Developing our people’s skills doesn’t just help to ensure Serco’s future success, it’s also something we know our people want from us. It really is a win-win.

For the past year, I’ve been chairing a Serco Apprenticeship Levy steering group, which brings together teams from across the business to lead what we’ve called our ‘Ready, Levy, Go’ campaign. The campaign aims to ensure that every part of the business is prepared for the Levy, and ready to seize this exciting opportunity.  

To promote Apprenticeships across our business, we have set up a dedicated Apprenticeship Levy and Education team, whose role is to work closely with our business units to identify their training needs, and find or develop bespoke courses that are right for them.

The team already delivers over 25 different Apprenticeships across a range of different sectors, from custodial care to aeronautical engineering - reflecting the enormous breadth of services that Serco provides.

And with the Levy approaching, we’re starting to introduce even more new courses which we hope will appeal to colleagues at all levels. For example, in May we’ll be launching a ground-breaking Chartered Management Degree Apprenticeship in partnership with the University of Wolverhampton, one of the first degree-level Apprenticeships seen in the UK. 

If we really seize the opportunity the Levy represents, I believe that Apprenticeships can help us take a huge step forward towards Serco’s ambition to be the best managed company in our sector.

The way I see it, the Levy is a large ring-fenced training budget, giving companies a chance to arm their people with the skills they need for future success.

It’s the responsibility of every business to use it, not lose it.