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Welcome Developments on Apprenticeship Levy

A number of techUK recommendations have been reflected in the recently published Apprenticeship Levy guidance documents.

On Friday 12 August, the Department for Education published the long-awaited Apprenticeship Levy guidance documents. While the Levy still poses some serious challenges for the tech sector, there were a number of significant developments which address key concerns outlined by techUK.

Since the announcement of the Apprenticeship Levy in July 2015, techUK has made a series of recommendations to Government officials and ministers on how to make the Levy work for the tech sector. Friday’s update on the Levy revealed a plethora of welcome developments, demonstrating that a number of substantial concerns on the detail of the Levy have been listened to and acted on.

techUK recommendations and outcomes:

Higher-Level Apprenticeships:

techUK urged Government to ensure that apprenticeship standards would not be dragged to the lowest common denominator to meet the 3m apprenticeship starts target. This would be done by ensuring enough funding is given to higher-level apprenticeships. 

On the whole, the proposed funding bands for higher-level tech apprentices accurately reflect the cost of training and assessment. Additionally, there was also an announcement that STEM apprenticeships would see an uplift in funding by 40% at Level 2 and 80% at Level 3 and above. This uplift recognises that employers of these apprentices are currently more likely to me be paying extra to providers on top of funding provided by Government.

The accurate provisional funding bands and the STEM uplift demonstrate that the tech sector’s recommendations were taken into account. There is a clear focus towards high-skilled apprenticeships of the future.

Employer-In House Training:

Following the appetite from the tech sector to become training providers, techUK advised Government to provide employers with in-house training options as well as a clear set of guidelines on how the training models can be used. Additionally, techUK stated that accreditation procedure for in-house training should be reviewed prior to the implementation of the Levy.

The guidance documents revealed a separate proposal for a new “employer-provider route”. This route would enable levy paying employers who want to train their own staff to do so without needing to go through as onerous an approval process as other providers. This proposal would also allow employers to use their levy funds for administrative costs and a wage for employees directly involved in the delivery of the apprenticeship.

This is a good step towards simplifying the employer in-house training route, allowing tech companies to use in-house expertise to train apprentices and existing staff members with their levy funds. Although there are still questions to be answered on this new route, it is a welcome development.

Scope of Training:

Since the inception of the Levy, techUK have maintained that it should be implemented in such a manner that would allow it to be used more flexibly so that it can work to help existing employees to adapt the needs of the fast changing work place.

The announcement on Friday that employers would be able to use their funds to train individuals to undertake an apprenticeship at the same or lower level than a qualification they already hold was therefore a welcome announcement. The caveat is that funding can only be used if the training will allow them to acquire a substantive new skill and the content is materially different from any prior training.

This proposal will allow organisations to reskill existing employees as well as give organisations the opportunity to invest in retraining programmes. techUK runs a successful Back to Work Programme, and with this proposal, Levy funds can be used to invest in and run similar initiatives which provides an opportunity for women returners to reskill into the tech sector.

Devolved Administrations:

Since skills is a devolved power, techUK recommended that UK Government ministers and officials cooperate more closely with their counterparts in the devolved administrations to ensure that apprenticeship schemes and funding mechanisms are sufficiently aligned.

The Scottish Government is currently consulting on their apprenticeship programme and welcoming feedback from business on how to best benefit from the Levy funding. Additionally, the guidance documents proposed that employers should be able to use their funds to pay for training apprentices whose main place of work is in England, whether they live in England or other parts of the UK.

While these are welcome steps towards better co-working, there is more to be done on ensuring that tech companies that operate across the UK are not losing any valuable training funds.

Administrative Costs:

Following the announcement of a 10% top-up of Levy funds within the first year, techUK stated that consideration should be given to whether top-up should be contributed to the increased administrative burden organisations face.

While this specific recommendation was not implemented, there is recognition of the administrative burden many organisations will face. Employer-providers (as outlined above) will be able to use funds in their account to pay for administration related to the delivery of the apprenticeships.

Diverting funds into supply chain:

Tech companies will be large contributors to the Levy. As such, techUK recommended that mechanisms should be put in place to allow Levy-paying organisations to divert their levy funds for use within their supply or distribution chain.

Following this recommendation, the Government are proposing that from 2018, levy-paying employers should be able to transfer up to 10% of their annual levy funds to other employers on the digital system, including ATAs. While the 10% figure is still being consulted on, this is valuable progress and will allow tech companies to contribute to the skills ecosystems within their region.

Institute for Apprenticeships:

Resulting from the announcement of a new “Institute for Apprenticeships”, techUK stated that Government must place strong tech and digital sector representation on the Institute. Unfortunately, there has been no further information the make-up of the Institute, and we would urge Government to provide more transparency on the process.  

Digital Skills:

techUK have maintained that digital skills must be at the forefront of every apprenticeship standard and form the core of each apprenticeship, regardless of what level.

Despite the assurances made by then Digital Minister, Ed Vaizey MP, digital skills do not appear to form the core of apprenticeships. We would therefore urge Government to reconsider including digital skills alongside English and Maths in minimum standards required for all new apprenticeship standards crated over the coming years.

While significant progress has been made on ensuring the Apprenticeship Levy works for employers, there is still more to be done. There are questions remaining on the Institute for Apprenticeships, key considerations on cross-border training, and more to be done on digital skills. techUK will continue to work with its members to ensure that the needs of the tech sector are reflected in the forthcoming development of the Apprenticeship Levy.



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