Today is the day that medium to large sized organisations in the UK will start paying a new levy to fund apprenticeship training across the country, with the aim of plugging Britain’s skills gaps, improving social mobility, and raising productivity.
To be precise, the levy applies to employers in the UK with an annual wage bill of over £3 million, who from today will start paying 0.5% of their payroll to HMRC. From 1st May those in England can start drawing down from their levy pot to train apprentices.
In a nutshell, the idea of the levy is to make employers take training more seriously by using the levy to fund apprenticeships rather than losing out financially. In uncertain times, it presents an opportunity for organisations that use their funding effectively to grow the skills required to adapt in future as the economical, technological and political climate shifts.
But it’s not just an opportunity for employers. The introduction of the levy presents an opportunity – and responsibility – for the higher education sector too. The fact that degree-apprenticeships are designed for and in conjunction with employers opens up a whole new world for higher education institutions to build even closer links to employers and deliver quality learning content that’s ripe for the workplace, as well as the chance to broker new and innovative education partnerships to provide solutions for employers’ different needs. The impact this will have on supporting social mobility by widening participation to a more diverse demographic of students is important too.
Higher education institutions have a significant role in making sure the apprenticeship levy is a success by delivering high quality degree apprenticeships that are fit for purpose and develop higher level skills, and which can win the respect of individuals and employers. But this doesn’t come without challenges.
And an important strategic challenge for HEIs is the devolution of apprenticeship policy across the UK regions. Currently, it’s only in England where the levy funding – expected to reach close to £2.5 billion by 2019-20 – will be ring-fenced entirely for funding apprentices and accessible to employers via the online Apprenticeship Service. Whereas in Scotland and Wales, funding for apprentices will be as per the current system. Less than half of Scotland’s estimated £221 million levy funding in 2017-18 will be used for apprenticeships, with remaining funds to be spent on a range of workforce development and pre-employment support programmes. In Wales an estimated £128 million is expected to go towards apprenticeships in the first year via the Welsh provider apprenticeship network.
Exact distribution of funding is still unclear, causing confusion and making it particularly difficult for employers with dispersed workforces across the UK to plan effectively and for higher education institutions to deliver apprenticeships in all nations. If ever there was an excuse for business to regard the levy as just another tax, and for universities to offer half-hearted, rebadged content, then this is it.
But learning providers bear the responsibility for getting it right. The levy presents an enormous opportunity for universities to play a part in shaping the UK’s future – and we have to work hard to ensure we do.
So where do we go from here?
Employers are leading the ‘trailblazer’ charge, and there is a lack of representation of higher education and training providers on the Institute for Apprenticeships panel, so providers must collaborate with and influence employers more than they ever have before.
Many higher education institutions are already delivering excellent vocational degree courses and working sporadically with employers. But to ensure this new form of work-based degree learning is fit for purpose and delivers the skills required, learning content needs a refreshed employer-focus.
One of the biggest complaints from employers is that, more often than not, traditional university graduates are not work-ready and do not have the right skills for the job. The introduction of degree apprenticeships offers higher education institutions the opportunity to collaborate closely with organisations and trade bodies and demonstrate that the sector can help develop a well-rounded UK workforce with transferrable skills. Providing career development pathways from low to high level in-work training enables people to continuously build their skills, developing a culture of lifelong learning.
Consistency in delivery and scale
But for the apprenticeship levy to really pay dividends, providers need to ensure that delivery is of a consistent high quality across the country. If standards vary, it’s likely that certain regions or skills areas will lag behind, and that the overall reputation of higher and degree apprenticeships will suffer.
Employers with more than one site may find it difficult to offer employees in different locations the same training experience, especially if they use more than one training provider. But technology-enabled, blended learning methods offer one solution with the ability to provide national reach and flexible delivery for both employers and employees. Working with one provider, or a consortium, makes life for employers just that little bit easier, with one point of contact, rather than having contracts with several providers.
Adapt adapt adapt
For universities to meet these challenges they must adapt their approach, particularly for delivering degree level skills. The traditional path through higher education is evolving, and universities will miss out if they don’t evolve with it.
All aspects of learning development and delivery, from technology to course structure, need to adapt to this new pathway to higher skills; it’s not as simple as tweaking and rebadging a current degree course. And universities need to listen and respond to the needs of employers here. By building stronger links between industry and universities, the sector will have a new avenue for growth.
The levy is now upon us. It’s our job as higher education providers to ensure employers are equipped to make an informed decision and truly align apprenticeships with business strategy, in order get the most out of them for themselves and their workers. There will be some who may have had their fingers burnt with apprenticeships in the past – with training that did not meet their expectation – and so we must not be complacent. This is a golden opportunity for higher education providers to prove their value, as well as that of degree apprenticeships.