The common misconception that the Levy is just another business tax is still very prevalent today. Despite major attempts to educate employers on the benefits of using their Levy fund there is still a massive underspend throughout the UK.
The evidence so far suggests employers are not utilising their apprenticeship levy, with more than £1bn in funds left unspent. Only 8 per cent of levy funds were spent in the first 10 months of the initiative.
Some causes for the huge underspend may be that many organisations are concerned that the content of apprenticeships will not deliver the skills they need. This is a consequence of the major delays in the development and approval of apprenticeship standards and the initial build of the standards.
Many SMEs are worried that the standards do not meet their needs as they were initially created with larger organisations in mind. Smaller employers need training that aids their ability to be durable, fast moving and agile as the organisation changes and grows. Staff roles can evolve over time, and apprenticeships need to reflect the same flexibility.
In addition to the above, apprenticeship standards which define programme content, are taking much longer to be approved which leaves many sectors without access to apprenticeships that work for them. It is not surprisingly employers are finding it hard to spend their Levy fund with all these barriers in their way.
On the flip side, there have been organisations that have been able to capitalise on the levy opportunity in a number of ways. This is because, while the scheme is aimed at addressing UK issues of productivity and growth, the employers themselves are accountable and it’s their own personal ambition that is the driving force in using the Levy appropriately and efficiently. The UK economy has already benefited greatly and employers have seen significant benefits too, despite there being only an 8 per cent investment so far.
It’s really important to remember that the Levy can be used to invest in training and is an important talent investment tool that could help to bridge industry skills gaps and increase the UK’s productivity. With some relatively minor changes, it can be a huge resource for making sure the UK keeps up in terms of professional development, collaboration and innovation.
Proof the Levy can work - Sotheby’s success with Levy
Sotheby’s were looking for a project management programme that would enable them to invest their Levy funds into nurturing and developing their in-house talent and decided The Growth Company provided the right fit.
Sotheby’s had not navigated the Levy system before so it was important for them to get this right. The engagement and interest in the programme from Sotheby’s employees was so high that the course was over-subscribed – with a waiting list in place for any future cohorts. The current 13-strong cohort were inducted in March and initial feedback is positive, the course will run for the next 12-18 months.
Read their full story here
Don’t forget we have put together and illustrative guide on how to use your Apprenticeship Service Account. This will help businesses navigate the complexities of the system and take advantage of the Levy. See our guide here.
Over to you
To help overcome your concerns with the Levy, we can manage, implement and provide hands-on support for practically every element of the Apprenticeship Levy.
And if you’re looking for help with organising your Levy, be sure to get in touch with our expert Levy team today: