Work-based learning isn’t about transactional relationships between employers and providers. True partnerships are the key to success.

For many, the introduction of the apprenticeship levy represented a game-changing opportunity for employers to take control of their workplace training requirements like never before.

Alongside a new, pot of money ring-fenced for apprenticeship training, the introduction of Trailblazer groups and the creation of new employer-led apprenticeship Standards, meant employers now had the training programmes they demanded and the available funds to pay for whatever they wanted. They are in charge.

But with an expected overspend of the levy predicted for 2021, the Government must balance its books and is faced with the ‘hard choices’ of finding more funds to meet this increased demand or limiting opportunity by imposing tighter eligibility rules for learners.

In the face of tighter Governmental control, speaking at an event hosted by Remit Group earlier this month, Simon Ashworth, Chief Policy Officer at the Association of Employers and Learning Providers (AELP), asked whether employers really are in the “driving seat’ when it comes to apprenticeships, if they understand the future risks associated with work-based training, and whether they recognise the role a training provider could play in helping them to navigate their future apprenticeship journey.

Simon explains this juxtaposition, “The reality is that although we have a demand-led programme, we have a fixed budget, which isn’t sustainable. The levy has been extremely successful in engaging employers in apprenticeships, so much so that in 2021 there is an anticipated national overspend of £500m. This means that at some point this finite funding must become ‘rationed’ and that will have an impact on employers.”

Currently, the apprenticeship levy generates around £2.5bn each year to be spent on apprenticeship training and assessment. Around £500m of this is passed to the devolved nations to spend as they want, while the remaining £2bn funds all apprenticeships in England, for both levy and non-levy paying employers.

Simon explains why these figures aren’t currently enough. “The Government’s assumption was that levy payers would spend around 50 per cent of their share of the pot, leaving 50 percent- around £1billion- to fund the 98 per cent of employers who do not pay the apprenticeship levy. The Government now predicts, however, that levy payers will spend 60% of their allocation meaning less funding to pay for apprenticeships in non-levy paying businesses.”

In addition, he points out that the introduction of degree and degree level apprenticeships at level 6 and 7 has been a double-edged sword and while they have no doubt enhanced the apprenticeship brand and provided progression opportunities where previously none existed, their higher banding cost is helping consume the overall apprenticeship budget more quickly.

For Simon, this clearly demonstrates that at its core, the levy remains a tax, paid to Government and in fact, therefore it is Government that is holding the lion share of power over the future of apprenticeships.
However, ‘employer choice’ remains a critical government mandate, a position reaffirmed by Skills Minister Anne Milton recently in her commitment to ‘apprentices at all ages and all levels.’ But the predicted ‘funding gap’ will require the Government to make some as they say ‘hard choices’ if no extra funding is found to balance employer demand and current policy objectives.

More funding begs the question, from where? Would Government increase the levy receipts from levy payers or reduce the £3m annual wage threshold and bring more employers into scope or redistribute Government funding from elsewhere?

Without, these additional funds, suggests Simon, the choices faced by Government include prioritising, or deprioritising certain programmes or sectors, or potentially, in a move that would see a return to pre-May 2017, a re-introduction of eligibility rules for individuals with a degree. Or that while well-paid senior executives accessing funds through an apprenticeship to undertake an MBA isn’t against the current funding rules, it may be considered against the ‘spirit’ of what the levy was for and therefore, lead to the implementation of a new wage threshold for learners to move individuals out of scope for apprenticeship training.

So, in this constant state of change, what can employers do to ensure they implement the right trends for their business?

“The apprenticeship reforms were revolutionary, but evolutionary change goes on and that is why it’s key to have a trusted provider partner”, says Simon.
“The best providers understand the landscape and will work with employers on a strategic level for career mapping, talent acquisition, early talent planning and in many cases creating a wider people development strategy – in addition to delivering high quality training”.

In summary, Simon explains that making work-based learning work is no longer about transactional relationships between employers and providers. True partnerships the key to success.

“The levy itself has been a game changing success – creating opportunities for new programmes, benefiting apprentices, employers and providers – they key message is it is here to stay, but employers need to understand the variable factors and that is where strategic training partnerships should be forged.”

If you’re business is keen on utilising its levy pot but wants identify and integrate the right approach to make the biggest impact get in touch and one of our levy experts will talk you through your options.