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Skills Update on the Apprenticeship Levy


This week, 10th June, Fashion Enter Ltd CEO Jenny Holloway attended the EMPOL Make UK – The Manufacturers’ Organisation ‘Skills Update’ meeting. The meeting revealed the latest survey statistics on apprenticeships and T-Levels.

Over the past 10 years, there has been constant change to the UK’s education system with each government. Currently the biggest change to technical education has been the introduction of the Apprenticeship Levy in 2017. The Levy means that companies with a pay bill of more than £3million are obliged to pay 0.5% of their bill towards apprenticeship training. Two years on, the Levy has had difficulties particularly over how companies spend their funds. Complexities with the transition from frameworks to standards has added to reform confusion and apprenticeships have been delayed or cancelled as a result.

Although many are using their levy funds there’s still a worrying amount that are not using the funds. 74% of manufacturers fall within the scope of the Levy, and yet funds are being wasted and are essentially a tax on the business.

The survey reveals that only 23% spend all of their Levy, with 77% failing to spend all of their Levy last year (2018-2019 financial year). This figure looks set to improve next year with 36% of companies planning to spend all of their Levy, however this still leaves a substantial 64% with wasted money.

The most common barrier to Levy payers recruiting apprentices is a lack of time and staff constraints, more so for smaller companies, with 55% citing this as their reason.

Smaller companies (1-50) have also had issues finding quality candidates while a lack of accessible training provision and standards were also listed as issues.

Out of £1.96bn raised from levy receipts, only £457million, 23% was spent on new starts.

Options for change included ideas such as broadening the Levy into a skills Levy. Focusing the available funds on younger learners and to stop funding a second qualification at the same level.

Moving on to T-Levels. T-Levels are brand new technical qualifications at Level 3 for 16-year-olds, providing an alternative to A-Levels. One T-Level is equivalent to three A-Levels and will be a two-year course combined of classroom learning, practical learning and a mandatory three-month placement. There are currently fifteen different T-Level routes, one of which is manufacturing and engineering. Studying a T-Level should lead to skilled employment upon completion.

The introduction of T-Levels should not add to the thousands of other technical qualifications but potentially replace the majority of Level 3 vocational qualifications, simplifying the system.

Overall, manufacturers support the principle behind T-Levels and recognise that they can be part of the solution to help fill the skills gap across the sector. More than 7 in 10 manufacturers are concerned about finding the skills they need for business and T-Levels must meet these principles in order to work for manufacturers.

Over two-thirds of manufacturers plan to spend their training budget over the year on technical engineering skills. Part of this will be through apprenticeships, which 80% of manufacturers offer.

Jenny Holloway comments: “There is a lot of uncertainty in education for skills at the moment with 55% of Levy payers using funding for an apprenticeship of an existing employee and only 23% of Levy payers spending their full entitlement – this is so low. Predicted spend is to increase up to 36% full spend but its still far too low; this is just a tax on business if the employer does not spend their levy pot. In addition there are issues now with the proposed T-Levels and we totally support the introduction of these new vocational qualifications that will have esteemed parity with A-Levels.

“One of the stumbling blocks with T-Levels has been the proposed three-months industrial placement. Employers are, rightly, concerned regarding Health and Safety issues in the work place and also how to implement a worthwhile training scheme. This is where there has been some movement with the abolishment of 3-months to be replaced by 315 hours, which can take place over the two-year period. We at Fashion Enter Ltd really want to support the T-Levels – and hope there is a package of support that we can help define to support the implementation and growth of T-Levels in schools today.”

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