Why the apprenticeship levy doesn’t just affect entry level roles
YPO's Lizzy Grayson discusses how the apprenticeship levy affects both high and low paid job roles.
The Apprenticeship Levy has been in place for well over a year and continues to be a contentious piece of legislation for many public and private sector organisations. From April 2017, UK businesses and public sector organisations spending over £3m on annual payroll have been subject to a 0.5% levy. Funds accumulated through the levy are then ring-fenced for investment into apprenticeship training.
The rhetoric around apprenticeships is often heavily focused on training for young people with little to no previous experience of an industry. Apprenticeship schemes have been an intrinsic part of the UK’s education system for centuries and continue to be an invaluable introduction to work for many young people across the country. If utilised correctly, funds raised via the Apprenticeship Levy will support the creation of apprenticeship roles for these young people but will also have an impact on training for many higher paid roles.
There are over 2,600 different organisations on the Education and Skills Funding register of approved apprenticeship providers. Many of these providers are equipped to offer apprenticeship training qualifications for those already within a business or public sector organisation. This feature of the Apprenticeship Levy has come under scrutiny and has been accused by many as a way for businesses and public sector organisations to avoid spending levy funds on new apprenticeship schemes. However, the value of training and progression within organisations is as prevalent an issue now as new job creation.
Over the last 12 months the rate of pay growth for British workers has been slow. It is becoming increasingly difficult for people within full time employment to progress, as has been highlighted in recent reports that UK house prices are rising significantly faster than wage increases. Using Apprenticeship Levy funds on training for existing employees can help to progress entry level apprentice roles with long term career development. The opportunity of training within organisations does not have to be weighed against the introduction of new apprenticeship roles, this is scope for both using Apprenticeship Levy funding.
With so much diverse training available it is perhaps a surprise to frequently read that so much Apprenticeship Levy funding remains unused. Procuring apprenticeship training post-Apprenticeship Levy has proved a difficult and time intensive task for many public sector organisations. The process of establishing new apprenticeship standards and frameworks has taken time to develop, with some organisations creating specific roles to negotiate compliant procurement routes. Another challenge for organisations is selecting from a growing range of potential apprenticeship providers and identifying which service is most appropriate.
To address the challenges faced by public sector organisations, YPO have launched the Apprenticeship Framework. This national framework makes it easier for organisations to spend their allocation of the Apprenticeship Levy fund effectively, covering all compliant standards and routes to procuring apprenticeship schemes.
The framework will re-open on a quarterly basis to allow for newly certified national and regional apprenticeship providers to join, ensuring that users of the YPO Apprenticeship Framework will have access to the widest possible range. YPO provides a clear route to the most relevant provider and service specific to the public sector organisation’s needs, whether this is creating entry level roles or further training for an existing employees.
YPO’s procurement role is to maximise the efficiency of spending by public sector organisations and ensure that funds allocated via the Apprenticeship Levy are spent in the most effective way. This role has been given more impetus by the impending April 2019 deadline, from which point organisations will start to lose their initial allocated funding if they haven’t spent it on procuring apprentices or train existing staff as the funds are only held for 24 months before they start depleting.
With many years’ of experience, YPO is one of the leading UK public sector procurement organisations. It is publicly owned which means that profits are returned to public sector customers, and helps give assurance that maximum savings can be made. YPO is committed to helping the public sector engage with the Apprenticeship Levy in a positive way.
To learn more about YPO’s Apprenticeship Framework and YPO’s wider Framework portfolio visit ypo.co.uk
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