'With a year to go, the forecast is patchy for the apprenticeship levy'

23rd March 2016 at 13:22
Kirstie Donnelly
The managing director of City & Guilds UK looks at what the Budget means for the apprenticeship levy

It’s been seven months since the policy announcement and we are only a year away from it coming into effect, but there are still huge question marks over how the apprenticeship levy will work. Many expected answers during Wednesday’s Budget, but they never materialised. While we now know that the new appenticeship funding system is not expected to be rolled out to all employers until 2019, we will have to wait until a vague April date when we're told that more information about how the levy will be implemented is to be released.

Whilst we all understand that change of this magnitude is inevitably slow and fraught with difficulty, it’s also understandable that employers are expressing concern and frustration at the fact that they don’t have the information they need to prepare for the changes that are coming increasingly quickly.

With all the discussion around the rising costs of a can of Coke, you might have missed the 10 per cent top up payment for levy-paying employers being announced. On the surface, it sounds like good news for business. Some of the more savvy employers will have no trouble spending their levy payment in addition to the top up, and I fully support this as long as it is used to deliver quality apprenticeships.

But there are still things to iron out. For one, some employers will struggle to spend the money on apprenticeships alone and would rather be given more flexibility to invest the money in other forms of training. Equally, I worry about what will be left over for small businesses. Small- and medium-sized employers employ 60 per cent of the UK workforce and we are still very much in the dark as to how they will be able to access apprenticeship funding.

With a year to go, the forecast is patchy for the levy. Employers are divided about whether the levy would encourage them to take on more apprentices and this is a real concern. If the new system is to work and achieve the much vaulted 3 million apprenticeships target, it must be easy to understand and easy to access for all.

The bottom line is the levy is a tax that will be taken whether employers like it or not – so it is vital that they are supportive of the government’s aims on this initiative to ensure that it sticks. What we now need is a commitment from government to truly listen to what employers want and need whilst simultaneously pushing for quality in all apprenticeship programmes. There must also be an education programme that helps sell the benefits of apprenticeships to businesses, would-be apprentices and their teachers and families.

Aside from the levy, I was encouraged to hear that professor Sir Adrian Smith, the University of London vice-chancellor, will lead a review into how to improve the study of maths from 16 to 18, identifying whether all pupils should study maths until they are 18. This is clearly a good thing as employers often cite numeracy as an area where there is a challenging skills gap. However, there must be a recognition that maths skills can and often should be taught outside of the traditional GCSE and A-level routes. I hope that employers will be closely involved with the design of the options on offer, so maths is taught in a way that delivers the workplace skills they need at the same time as engaging learners so they can be successful in life and the workplace.

The same can be said of digital skills. The announcement of direct government support being made available to adults wishing to study digital skills at any qualification level is welcome. There will be no jobs in the future where you can get by without these skills. But going forward, in addition to supporting adult learning, the focus needs to be on embedding these skills at a young age as part of a suite of core employability skills that create work-ready young people.

Was this truly a "Budget for the next generation" as Osborne said? That remains to be seen. Let’s hope the announcements in April give us greater clarity on how we can all work together to create a truly world-class apprenticeship and skills system.

Kirstie Donnelly is managing director at City & Guilds. She tweets at @MDcityandguilds

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