Confusion reigns over apprenticeship reform

Businesses are missing opportunities to ‘upskill’ their workforces with employers confused about how the apprenticeship levy system works, a Lancashire Business View report has revealed.

Apprenticeships are no longer confined to school-leavers taking up traditional ‘hands-on’ trades. But implementation of new ways to deliver – and pay for – apprenticeships has been so badly handled that new registrations have actually fallen.

Lisa Whiteoak, director of TrainingStation, told Lancashire Business View: “The apprenticeship levy scheme imposes a levy on large employers, those with a pay bill over £3m each year, to help fund apprenticeship training within their business. But this has left a lot of employers confused about how it works and many don’t even know that they are paying into the levy.”

Whiteoak says that used correctly the new system can be a great benefit to all sizes of business. “The government provides all of the funding for training for 16- to 18-year-old apprentices if a company is a non-levy employer, and contributes 90 per cent of the funding for candidates over 19. The government is also offering an incentive of £1,000 for both levy and non-levy payers to take on young apprentices aged 16-18, so now is the ideal time to evaluate your workforce and assess your future requirements.”

Dr Rachel Cragg, pro vice-chancellor (academic development) at the University of Central Lancashire (UCLan), agrees that the message has not been well promoted. She told Lancashire Business View:  “There is a general lack of awareness and understanding of apprenticeships, how they work, and what they can offer.”

Michele Lawty-Jones, director of the Lancashire Skills Hub, has seen a significant drop in apprenticeship starts since the introduction of the reforms in April 2017. She told Lancashire Business View: “There are different patterns in different sectors – the greatest drops in starts have been in sectors such as health and social care and visitor economy, with lesser drops in traditional areas such as construction and engineering. There is slight growth in digital apprenticeship starts which is bucking overall trends.”

However she added: “We are starting to see growth in higher level and degree apprenticeships as new standards are being signed off – and we expect to see continued growth in this area.”

It’s not a mystery why businesses are shying away from apprenticeships, according to the Lancashire Business View report. Delivery of new frameworks was staged, but long delays in the implementation left many industries in limbo, stuck between (or adopting both) new and old standards. And the new levy fund can seem overly complex on first look. John Westhead, head of operations and learning at Training 2000, told the magazine the companies he meets are also concerned about the perceived time it takes to train a new apprentice.

He said: “Employers want to recruit because they have a staff shortage, and they don’t feel that an apprentice who then has to spend 20 per cent of their time training will fill that gap, especially if they require supervision and mentoring from colleagues,” he says.

However, Debbie Simpson of Lancaster University says apprenticeships are most effective when viewed as a wider proposal, the opportunity to upskill a whole workforce and not merely a way of recruiting school-leavers. She said: “One perceived barrier is the belief that apprentices are young, new recruits. However, the latest apprenticeship programmes are very relevant to existing employees.”

And Hannah Baker, business development manager, apprenticeships at Blackburn College, said: “There is a wealth of support available to businesses, whether their apprenticeship plans are focused on professional development and upskilling for existing staff or to support recruitment. Despite the concerns, Michele Lawty-Jones believes apprenticeships in the county have a bright future: “There are strong foundations in place, both in terms of the provider base and employer engagement.

“Together we believe we can continue to make apprenticeships work for Lancashire – to home grow talent and skills to meet the needs of our employers now and in the future.”

A full version of this report is published in the latest issue of Lancashire Business View, the independent magazine for commerce and business which has been connecting the county since 2005. The report can be accessed by clicking here.

The Apprenticeship Guide is sponsored by Blackburn College, Blackpool and The Fylde College, CETAD, North Lancs Training Group, Preston’s College, Training 2000, Training Station and UCLan.