Apprenticeship Levy

The Apprenticeship Levy – Why are people not shouting from the roof tops?

Interesting to read the man in our trade press who enjoys tweeting to himself because he has no-one commenting or sharing his tweets about his latest discovery about the Apprenticeship levy – a bit like he has found something no-one else has and he is such a genius. 

Whilst there is much digging about the long grass about whether there is or isn’t an underspend – aren’t we really missing the point here. I always said my ex-wife was penny wise and pound foolish and it does feel a bit like that with the levy. 

For those of us who were involved in discussions when the levy was being thought through and George Osbourne drove through the agenda, including what it should be called, it was clear this was a work of genius – if and only if you worked in the Treasury where naturally their approach is to minimise spend whilst being seen to support all Governmental initiatives.

Let’s cast our minds back to those heady days of 2016/17. We had an almost entirely fully funded Apprenticeship system from general taxation, costing you and I in the order of £1.5bn a year, contracted through allocations to providers earmarked for 16-18 provision and 19+ with no possibility of virement. Result was a system with flaws but almost every year a 19+ budget overspent and a 16-18 budget underspent. 

The Government was clearly investing in Apprenticeship provision – national campaigns to encourage take-up regularly on our TV screens, NAW, a festival of politicians out with the same employers announcing a recycling of the same Apprenticeship recruitment numbers only to announce a restructuring after the politicians have exited stage left – with little in the way of significant recruitment. 60% or more of Apprenticeship recruitment from the SME community who received little in the way of praise – often taking on more Apprentices than their PLC counterparts. Indeed, in Financial Services alone – Apprentices were a dirty word; they couldn’t possibly have the maturity to work in our businesses – I know because I battled almost daily in one of them for them to even recognise the concept of a balanced recruitment approach. 

Now, little in the way of advertising – replaced by competing initiatives, the Government of DFE doing nothing to encourage employers to spend piggy banks of levy funds – even now nearly four years on, many of them not even knowing they have a pot to spend.

The analogy I would use it that of issuing gift vouchers. A dear friend of mine who runs a very successful Hotel and Restaurant venue once said to me he loves to sell gift vouchers – Why I asked? – because 50% of them are never redeemed he said so it is the most profitable thing we sell. If only we had Christmas and Mother’s Day ever week.

The levy is a bit like that – you save the money in your piggy bank and lose it after two years. Nobody tells you it is there, only if your payroll or HR team identify the DAS account, have the password and know how to understand it do they know it even exists.

So why is it GENIUS – we now have an Apprenticeship system fully funded by an earmarked tax – no reduction in our general taxation to compensate for this, saving the Treasury not only the £1.5bn they once invested but also the additional net underspend (after non levy spending) that goes back to the Treasury – I wouldn’t be far out to suggest the Treasury is a net £2bn better off each year. 

Investment in Apprenticeships – I don’t think so. Promotion to levy payers to help them spend it, I don’t think but yet again no-one in the CBI or other bodies really challenge what Does I believe one of the most cynical pieces of duplicity in politics I have ever seen.

But I am sure we will revert back to a discussion about when is an underspend not an underspend. 

Above all, we now have an Apprenticeship system more than fully funded by the top 10% of employers across the nation and of those, 1/3 are from within the Public Sector. We complain about under-funding of our beloved NHS at the same time as they return hundreds of millions each year, just in unspent levy funds. 

Genius – a work of absolute genius if you have never experienced the benefits that Apprentices bring to society but as we have seen in the past three years – a destruction of our Apprenticeship system, decline in volumes with no commensurate increased in Quality and above all, more young people for whom the levy was designed to have benefit becoming the most dis-advantaged. 

Now that is something worthy of a debate and campaign, isn’t it?

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