Employers split over plans to introduce new apprenticeship levy
Employers are divided over the Government’s plans to introduce an apprenticeships levy with 39% in favour of the levy in principle, 31% opposed and a further 30% undecided, according to a new survey of large employers from the CIPD, the professional body for HR and people development.
The apprenticeships levy is a key part of the Government’s plan to boost productivity and to encourage employers to invest more in their workforce training and development.
The CIPD’s survey of 275 employers, conducted to inform its response to the Government consultation on the levy which closes today (Friday 2nd October), found that 30% of organisations believe the levy would encourage them to develop an apprenticeship programme to help build key skills. A similar proportion (30%) think the levy would help increase the quantity of apprenticeships.
However, the survey also shows that almost a third (31%) of organisations think the levy would cause them to reduce their investment in other areas of workforce training and development. A further 22% believe the levy could encourage employers to accredit training they would be running anyway as apprenticeship schemes, while just one in five (20%) of respondents think the levy will drive up quality of apprenticeship schemes.
CIPD Chief Executive Peter Cheese commented: “The Government has rightly focused on the need to increase the quantity and quality of apprenticeships in the UK and is hoping the levy will lead to increased investment by employers in these schemes. However, our survey suggests that boosting both numbers and quality at the same time will be a significant challenge. If the Government is serious about raising the quality of our apprenticeship system, it is important the levy is weighted towards increasing the number of apprenticeships at or above level 3.”
“It’s also important the apprenticeships levy is not regarded as a solution in itself to the skills and productivity challenges facing the UK. Apprenticeships are important, but to ensure that people’s skills are developed and used effectively in the workplace, we also need to prioritise investment in organisations’ leadership and people management capability which underpins more strategic workforce investment. We need to balance the strong training and support that workers receive during an apprenticeship with lifelong skills development, to ensure that employees and businesses stay productive.”
The survey also found:
- The majority of large employers (47%) believe they should be able to use funding from the apprenticeships levy to invest in apprenticeships as they see fit
- Just 10% of respondents think employers should only be able to use the apprenticeships levy funding for level 3 qualifications and above
Ben Willmott, Head of Public Policy at the CIPD, commented: “Official statistics show that about six in ten apprenticeships started since 2009 have been at intermediate level 2, with typically about a third at advanced level three and just a fraction, three per cent or less, at higher level. The introduction of the levy must be used as an opportunity to focus on raising quality levels so that apprenticeships are regarded as a viable alternative to university and not seen as a poor second choice for academic under-achievers. This is why we need a broader review of higher and further education funding to ensure that the further and vocational education is not treated as a poor relation in funding terms. More universities and other education providers need to build links with their local employers and help create more higher apprenticeship schemes.
When asked how the government could be sure that the apprenticeships levy supports the development of high-quality apprenticeship provision that meets employer needs, 39% of employers said there should be more oversight and evaluation of apprenticeship providers. Just over a third of organisations think that an over-arching apprenticeship qualification should be introduced against which all apprenticeships should be assessed against, and 26% of respondents believe that to in order to improve the quality of apprenticeships the levy should only be used to fund level three and above apprenticeships.
In its response to the government consultation the CIPD makes the following points:
- The apprenticeships levy is not sufficient in itself to increase organisations’ investment in skills and could have the unintended consequence of taking investment away from other workforce development and training activities.
- The Government should consider weighting the levy funding to encourage organisations to invest more in level 3 and above apprenticeships. This would still enable organisations to use an agreed maximum proportion of their levy funding for level two apprenticeships, but would require them to use the balance for level three and above apprenticeships.
- Employers that are investing in apprenticeship programmes for the first time will need high quality, independent advice to help them develop the right type of programme
- There should be an increased focus on encouraging more universities and further education institutes to work with local employers to develop higher level apprenticeships
- The evaluation and quality control of apprenticeship training providers needs to be improved