Apprenticeship levy review Strategic HR
their community, suppliers are local,
customers are local and so are
employees,” adds Impey. “If the
government is genuinely committed
to a strategy of ‘levelling up’ then
enabling small businesses to train
and develop their staff is really
really important.”
There are expectations across
the industry that the March Budget
will bring a much-needed cash
injection, allowing SMEs to take full
advantage of their access to DAS.
The AELP, for one, has called for the
further allocation of £1.5 billion.
“We don’t really care where the
money comes from,” says Dawe. “But
that money is needed, just to bring
things back to where they were for
SMEs prior to 2017.”
Any such boost will surely only
be a temporary fix for what is
fundamentally a design flaw, but
many stakeholders caution against
further reform.
Phillips says that what is needed is
patience and persistence to make the
current system work. Impey agrees:
“It’s quite important that we don’t
look at what’s happening in the
apprenticeship system as a failure. It’s
actually to do with market demand
exceeding the funding available.”
From the HR perspective, Tindall
believes that the levy system has
made L&D more effective.
“The money is sitting there, and
the only consideration is how to
allocate that money fairly,” he
comments. “If we said that three or
four years ago you would think ‘we’d
love to be in that situation’. We are in
that situation now and yet people are
calling for reform.”
It’s unlikely that calls to overhaul
the system will subside any time
soon. The CIPD has long argued for
reform, with its own research
showing that 53% of levy-payers
would prefer a wider training levy
compared to 17% whose preference
is for an apprenticeship levy.
Sandra McNally, director of the
education and skills programme
at London School of Economics’
Centre for Economic Performance,
says that some degree of further
reform is inevitable.
“It is a good idea to have a policy
that incentivises firms to take on
apprenticeships,” she says. “But this is
not enough to address the skills
deficit in Britain.”
With many employers now using
the levy for that very purpose, it
has resulted in a marked shift in
demographics. Apprenticeship
starts by over-25s have increased by
44.8% since the 2017 reforms, while
starts by those under 19 have fallen
by 12.8%.
Moat argues that everyone should
be able to take advantage of the levy.
“There’s a tendency to assume
apprenticeships are just for younger
candidates, but I strongly believe that
apprenticeships should be available
to everyone – from those who have
just left school to people who have
been in the workforce for many
years, including older workers,” he
tells HR magazine. “We have one of
the most age-diverse apprenticeship
schemes in the industry, with
apprentices aged from 20 to 61
years old.”
But McNally notes that while we
do need to focus on reskilling and
upskilling, not every employee will
require the extensive training that an
apprenticeship provides.
She says: “It would be useful to
consider ways of incentivising
reskilling employees that go far
beyond apprenticeships.
“One possibility would be to
extend research and development
tax credits to include training,
which is done in Austria.”
There are further lessons to be
drawn from abroad, McNally says,
noting a proliferation of
apprenticeship standards in the
British system. The Institute for
Apprenticeships website currently
shows 710 standards, where Germany
has 320 and Switzerland has just 240.
Richmond also points to this and
believes the Swiss and German
systems focus on quality whereas the
British one offers quantity, often at a
lower skill level.
“No other country would allow
these courses into their apprenticeship
system,” he claims.
Despite the impact on SMEs,
Impey – a long-time apprentice
employer – advises against reforming
the system at the moment.
“I think the question around
funding is much much bigger than
‘how do we make apprenticeships
affordable?’ It’s ‘how do we respond
to this new economy?’” he comments.
“In the modern global economy
talent is your most important
infrastructure. It’s the engine of the
economy. Having the right skills
investment and the right lifelong
learning system in place is almost
the most important infrastructure
consideration that we need to
make now.” HR
Talent is
your most
important
asset, it’s the
engine of
the economy
hrmagazine.co.uk April 2020 HR 35
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