How employers can prepare for the Apprenticeship Levy changes

In September of last year, the UK government announced that the Apprenticeship Levy will be replaced with a new Growth and Skills Levy. With over ￡4bn unspent funds from the Levy being returned to the Treasury, according to CBI, rethinking the structure and conditions of the Levy is long overdue.

So far, without any real plan set in stone by the government, there have been a lot of question marks loitering over the changes and the impact they will have.

Although the reform looks to bring significant developments to the way that employers can utilise their Apprenticeship Levy contributions, we don’t yet know exactly what these changes will look like or when they will come into effect.

However, whilst we eagerly await more detail on the specifics, we’ve outlined everything we know so far so you can better understand what the new levy is shaping up to look like.

Everything we know so far:

The reason for the Growth and Skills Levy

As mentioned, a large portion of Levy funds remain unspent and handed back to the Treasury.? A large part of that is down to the complexity of the system, which is very difficult for employers to navigate. This in turn results in low employer engagement and poor apprenticeship achievement rates.

The Growth and Skills Levy main aim is to bring about flexibility for employers in regard to what they can spend their contributions on. While apprenticeships can be a brilliant resolution for the skills gaps that many employers face, they simply and evidently don’t suit all business needs and models – this is something that our employer partners consistently feed back to us as a training provider.

Expanding training options to increase flexibility

The Levy reforms promise to ease the restrictions on what the funds can be spent on – instead of solely apprenticeships, employers will be able to spend their funds on alternative training. However, what types of training exactly, and how much of the Levy can be spent on non-apprenticeship programmes, remains unconfirmed.

The announcement explained that the reformed levy will include new foundation apprenticeships and allow for funding shorter apprenticeships. Businesses often need to upskill their staff quickly to meet rapidly changing priorities and landscapes and 12 months+ course isn’t exactly ideal for these scenarios.

But whether short-term, accredited training will be accommodated in the new regulations, isn’t clear yet. The government announcement suggests that this type of training could come later after the new government-body, Skills England, begin assessing the priority of skills needs.

We do know that the government are committed on growing the following sectors, however: digital skills, green jobs and healthcare.

How much funding will be allocated for apprenticeships vs alternative training?

It is believed that 50% of the levy funds will be reserved for apprenticeship training, though this figure is yet to be confirmed by the government. And whilst employers will still be able to spend their entire levy pot on apprenticeships, should they wish to do so, they will not have the option to spend their full contribution on non-apprenticeship training.

?

So, are the changes positive for employers?

It seems that the growth and skills levy will be a positive change for employers. The bottom line is that the changes are being made to support employers with their skills-development by increasing the flexibility and helping them get more out of their contributions.

Not only this, but small and medium-sized enterprises will have better access to the funds needed for training apprentices.

Learning Curve Group actively contributes to shaping policy by leading and engaging in discussions with key stakeholders and we will continue to do so to ensure the changes are going to provider greater flexibility for employers. We very much welcome these changes, viewing it as a positive development for the UK skills space which has long-been advocated for by both employers and training providers.

?

What should employers do now?

We know that these changes will take place gradually. The Government have stated that Skills England will only be in motion once the Institute for Apprenticeships and Technical Education (IfATE) is abolished.

However, we also know that they are working to reduce the complexities in the UK Skills System by collaborating with employers, training providers and colleges to ensure the reforms are beneficial to both the economy and the workforce.

?

We’re eager to support you. Speak with us about the Growth and Skills Levy or other ways in which we can support your workforce development plans to maximise productivity and your learning and development budget.

Feel free to drop us a direct message