Solace blog

All local authorities have an interest in supporting local apprenticeship levy payers to use their funds.

Close to £3 billion is expected to be paid in the first year alone and recent research shows that two-thirds are still not using their funds at all. The main barrier is low awareness. Most people assume your typical 16-18-year-old apprentice, in a trade or administrative role, is the only type of apprenticeship available.

The reality is broader; apprenticeships are simply structured vocational training programmes on an approved apprenticeship scheme and can include a range of qualifications from lower level to degree and professional qualifications.

Attitudes towards apprenticeships and higher education are shifting as the value of apprenticeships becomes more widely recognised by young people, parents, and employers. Apprenticeships offer an opportunity to attract and develop a diverse range of talent for employers and allow people of all ages and levels of experience to earn and learn at the same time as gaining valuable on the job experience.

Our recent Generation Apprentice report surveyed 1000 young people and 1000 parents on their attitudes to apprenticeships. The survey found that for both young people and their parents the well-trodden path of school to university to graduate training seems to be less of a guarantee of future success than it was. Almost half (42%) of young people think apprenticeships and university degrees are of equal value and two-thirds of young people think that you do not need to go to university to get a well-paid job.

The research found that attitudes towards apprenticeships as a viable route into a well-paid, professional career are undergoing an evolution, with 70% of young people and 79% of parents believing that apprenticeships offer good career prospects. Earn while you learn programmes offer an increasingly attractive higher education route for young talent and for parents who may provide financial support – which is why, if employers want to access the best talent in the market, they need to develop apprenticeship programmes that work for them.

Alongside surveying young people and parents we also surveyed 500 employers who are required to pay the Levy and found that 86% of those surveyed currently recruit apprentices. The most popular reasons for recruiting apprentices is that employers can train them to meet the skills needs of their organisation and they also bring with them new ideas and innovation.

Given the ongoing skills gap facing a number of employers, this is an invaluable quality and for local authorities, the glaring example is in the provision of Health and Social Care services. Apprenticeships have existed at the lower levels in these areas for a while and are now being extended to include new apprenticeship Standards at the higher levels. 20% of the employers we surveyed currently use an apprenticeship system to upskill their existing employees in health and social care.

While the survey found that the Apprenticeship Levy is encouraging 79% of employers to recruit more apprentices than they would have otherwise, awareness is still low across some core fundamental areas, such as the type of training that qualifies and the financial timeframes. One in five of the employers surveyed are not aware that they will lose the ability to utilise their Levy contributions two years after payment, demonstrating that there is still work to be done in improving employers’ understanding of the system.

The Levy should be encouraging employers to think more laterally about their approach to talent development.

Employers can use apprenticeships to both tap into new talent pools and upskill existing people. Grant Thornton is encouraging organisations to use the Levy as an opportunity to develop their entire workforce. As an example, in partnership with Cranfield Business School, we recently launched the first Executive MBA programme to use the Apprenticeship Levy.

Just over half of the employers we surveyed currently use an apprenticeship system to upskill their existing employees, showing there is still a huge number not taking advantage of this opportunity.

Eligible training can include degree, master’s degree, and professional qualifications, as well as lower level qualifications for junior hires or low skilled roles. There is no age limit on apprenticeships and training can be in specialist or organisational functions of HR, Legal Finance, Marketing, Operations or Management.

How can local authorities do more?

Local authorities can stimulate demand through leading by example with their own workforce, while also promoting the wide range available training with local employers. There is an opportunity to incentives employers with the transfer of up to 10% of levy funds for apprenticeship training of other employers.

Transfers are initially limited to only one other employer and central government plan to expand this to multiple employers in time. There are practical points around supporting the promotion of programmes with schools and colleges and connecting employers with prospective learners, say through a job board site. If employers understand more about the types of training and funding that is available, they would more likely be encouraged to invest in training and job creation – good for the area and good for local people.

For more information, please contact tom.j.pearce@uk.gt.com.

By Tom Pearce, Talent Solutions Executive, Grant Thornton UK LLP