Mike Boswell, head of apprenticeship services at NCFE, looks at how the changing funding of apprenticeships will put employers even more at the centre of shaping skills provision.
The introduction of the Apprenticeship Levy is now just around the corner. Unsurprisingly, discussion around the value, volume and reform of apprenticeships is at an all-time high, with the forthcoming changes set to affect employers, providers and learners.
This year’s National Apprenticeship Week took place earlier this month and was, as always, a chance to highlight the importance of apprenticeships and to discuss the changes taking place in this area. At NCFE, we can’t emphasise enough our belief in the value of this route for so many learners, and we’ve seen first-hand the success that apprenticeships can bring.
They offer learners the opportunity to gain the skills and knowledge required to work in their chosen career, while also earning and getting real, on-the-job experience, which of course benefits the employer too. As we all know, apprenticeships are going through a transitional period, with spending power moving into the hands of employers, the introduction of a new funding mechanism and of the new apprenticeship standards.
The Apprenticeship Levy is of course part of the Government’s plans to increase the number of businesses taking on apprenticeships, as it continues its drive to reach three million apprenticeship starts by 2020. From next month, all employers with an annual wage bill of over £3m will be required to pay a 0.5% tax, which they’ll be able to spend on training new apprentices or existing employees.
In terms of how it will all work – employers that pay the levy will use an apprenticeship service account to manage their levy allocation, which will include a 10% ‘top-up’ from the Government. If they use all of their levy allocation up, they’ll be expected to pay a 10% contribution towards the funding rate they’ve negotiated with a provider, with the Government paying the remaining 90%.
Employers that don’t pay the levy (those whose wage bill is below £3m) will not be using the apprenticeship service account immediately, and will rely on finding a provider with a funding allocation. The employer would then be required to pay a 10% contribution towards the funding rate they’ve negotiated with a provider (again, the Government would pay the remaining 90%). If the non-levied employer is taking on 16-18 year old apprentices in a business with fewer than 50 staff, this contribution would be waived.
The levy is intended to encourage employers to invest in apprenticeships for their workforce – putting them under pressure to create the optimal apprenticeship scheme for their business. A lot of work has gone into ensuring that they are in the driving seat when negotiating prices and setting out their apprenticeship needs. According to the Department for Education, ‘the levy will allow us to double investment in apprenticeships by 2020 from 2010 levels, to £2.5bn’. However, only time will tell whether this initiative leads to an increase in the number of apprenticeships and, most importantly, jobs.
For businesses around the UK, this has meant getting to grips with what the levy means for them and how they can best navigate the opportunity and overcome the challenges it presents.
What we do know is that large employers and a growing number of small and medium-sized enterprises want to get involved in apprenticeships (some for the first time), and apprenticeships are increasingly being seen as a viable alternative to the academic route, which can only be positive.
At NCFE, we can attest from our own perspective to an increase in employers who are looking more closely at their planning and recruitment strategies and building opportunities to include apprenticeships as a viable and sustainable part of their workforce. Analysis from the Institute for Fiscal Studies recently showed that 60% of employees in the UK will work for an employer that pays the levy, showing the scale of this measure.
My view is that the levy has – and will continue to – made employers think differently about how they use their apprenticeship programmes, and the qualifications that form part of those programmes. It has led a number of employers to look at qualifications at a higher level than they would have done previously, and at parts of their businesses that have never been serviced by apprenticeships before, as they look to maximise their levy funds.
Another effect of the levy will be the change of dynamic in the relationship between provider and employer; employers will expect more from their provider, and providers will see a difference in how they contract and negotiate with employers.
We’re here to support you both now and in the future with the new standards and end point assessment. Identifying how best to apply levy funds to drive appropriate skills development is vital, so we’re on hand to help you make the levy work for your business.
We’re pleased to be one of the organisations approved by the Skills Funding Agency to deliver end point assessment, with a particular focus on the healthcare, customer service, and leadership and management sectors. This, combined with our 170 years of experience, means we’re well-placed to advise you on how to maximise opportunities around this.
Our team of experienced assessment professionals will work with employers and providers to offer full end-point assessment services, including designing, developing and delivering quality and robust assessments.
We’re delighted that both the NCFE and CACHE brands have been approved to deliver end-point assessment for standards in the leadership and management, customer service, and health and social care sectors. We will continue to strengthen our portfolio as more standards go live.
End-point assessment is of course very different from the continuous assessment that so many are used to. Therefore, in order to give all parties involved the best chance of success, we’ll work with selected partners to ensure that learners are ready to take the assessment – both practically and mentally. We need to remember that learner achievement is crucial, and a key first step here will be to ensure that all learners are informed right at the start of their apprenticeship that they’ll be assessed via end-point assessment.
In this period of change, awarding organisations, providers and employers will all need to work together to navigate the landscape and deliver high quality apprenticeships that will provide learners with the essential skills they need to succeed, and help employers to plug skills gaps in their businesses.
If you’d like to talk about how we can support you with making the most of the levy, please get in touch with our apprenticeship consultants on 0191 240 8950, email firstname.lastname@example.org or visit our dedicated website at www.levy.ncfe.org.uk.
Chelsea Dryden, Junior Tester at NCFE
Following a year-long apprenticeship with NCFE, Chelsea Dryden successfully secured a permanent role with the company as a junior tester.
Chelsea’s journey as an apprentice began when she signed up for NCFE’s Rising Stars Academy. The academy was created to help address the skills shortage of IT workers in the North East, and it aimed to give young people a stepping stone to begin their career in IT.
The academy was a 15 week boot camp style, intensive learning experience. During the 15 weeks Chelsea gained a number of qualifications that are respected in the IT sector, including Microsoft Technical Associate (MTA) certificates and Network Fundamentals. The academy members also benefited from work experience across the business to get a feel for not only what it was like to work in IT, but also for a general office environment.
After she graduated from the NCFE Rising Stars Academy, Chelsea started her apprenticeship as a software tester.
Chelsea said: “The work experience I was given was brilliant – rather than just shadowing, NCFE colleagues trusted me to take the reins and really get involved. The work experience not only gave me technical skills, but it also improved my communication skills. I was shown what testers do on a daily basis and was also lucky enough to see things such as the automation script and have a go at writing code, which is something that helps run tests faster and more frequently.”
While obtaining valuable work experience, Chelsea was also undertaking Level 3 diplomas. She continued: “I didn’t initially realise how much my diplomas would benefit me in my job role. Doing the qualifications helped as when I was shown the automated code, I could understand it and it helped me to pick it up more easily. I don’t have A Levels, so I needed some qualifications and these are directly related to my dream career.”
Chelsea would highly recommend an apprenticeship to other young people. “Thanks to this apprenticeship, I now have a full-time job with NCFE in the area I want to continue my career. The work experience gave me the confidence and the skills to do this job, while my qualifications provided the supporting knowledge. I’ve had some amazing opportunities and I’m only 18 years old, so I’m looking forward to continuing to build my skills and learning while I earn.”