Employers can overcome key challenges to make use of their levy funds

When the apprenticeship levy was introduced in April 2017, it was a key milestone in a bid to increase spend on skills development in the UK and boost the number of people taking up an apprenticeship.

Yet since its inception, its impact has not had the desired effect. There has been a drop in the number of apprenticeships starts (with many pointing the finger at the levy) and some employers have found information around the levy confusing and clear guidance difficult to find.

City & Guilds and the Institute of Leadership and Management (ILM), recently conducted research into employers’ feelings about the levy and how they have spent their levy funds. The research gives an overview of the impact the levy has had on apprenticeships, training and businesses and it has revealed key challenges that need to be overcome to make the levy work for more employers.

Frustrated and unhappy

The report by City & Guilds and the ILM ‘Flex for Success?’[i], shows that businesses have been left feeling frustrated and unhappy with the current system. There is clear desire from employers for more flexibility in the apprenticeship levy as they look for the training that suits their teams, needs and structure.

The report also showed that 92% of the 765 businesses surveyed said they wanted greater flexibility on how they can spend their levy funds. When employers were asked whether they would spend their funds on apprenticeships or on other forms of training if granted greater flexibility, there was almost a 50/50 split with 55% saying apprenticeships and 45% saying they want to spend it on other forms of training.

Vital funds going to waste

One of the most worrying findings of the research is the vast amount of funds that are yet to be spent. The government stated that most of the funds have been withdrawn from levy accounts, yet according to the report 57% of the businesses surveyed claimed they had only spent between zero and 50% of the funds available to them.

With the date (April 2019) when funds begin to expire looming, the government, training providers and education institutes need to work together to make the system work for more businesses. Vital roles and opportunities for young people are being missed for every penny that isn’t spent in the right place.

Although many businesses are calling for changes to the levy and greater flexibility, there are positives to be found in the report.

Challenges can be overcome

The good news is that the barriers many employers are stating as obstacles to spending their levy pots can be overcome without government intervention or changes to the levy. Thirty per cent of employers stated that training providers, colleges and universities don’t understand what they need, which is almost a third of businesses.

The report looked into this further and of the 30% of respondents who said this, 43% said training was not tailored to their needs, 40% said the apprenticeships and training they need is not offered to them in their area and 39% said providers don’t understand the needs of their business and how it works.

These challenges can be overcome if businesses partner with training providers that offer flexible, tailored training that come as a result of working to understand the needs of the business.

Tailored training

As an ‘Outstanding’ graded national training provider, BB Training works closely with employers in early years, adult social care and clinical care to understand their needs and provide them with valuable information that allows them to utilise the funds available in their levy pot.

Because we’ve worked closely with employers in these sectors, we’ve seen the success of the businesses that have been able to use their funds. We know if businesses work closely with flexible providers, they can invest in vital training that helps to create a conveyor belt of talent.

The system must be employer led

When the chancellor announced positive changes to the levy in the budget last autumn, it was welcomed by many employers and businesses in the training sector. Yet since the announcement, the date for when these changes will be applied was retracted and a new date is still to be put forward. This has left businesses in limbo and has put vital funds at risk of being wasted. We hope to see this date set soon and further changes that will meet the demand from employers for greater flexibility. The system has to be employer led or no one benefits.

^[i] https://www.cityandguilds.com/what-we-offer/employers/optimising-your-levy