Apprenticeship Levy, News

The Apprenticeship Levy is Born

06 April 2017 by Isla Lightfoot

Today marks the start of the new tax year, and a landmark moment for education and training in the UK.

For decades, successive Governments have worried about how to close the productivity gap with the US and Europe – now standing at between 22 and 26%

One ongoing debate has been about how to encourage businesses to invest in vocational training.

Unlike most other European economies, Britain has never had a mature vocational education system which incentivises firms to invest in workplace qualifications

Indeed, other than some highly technical professions such as engineering, apprenticeship provision has been typically poor quality and delivered by low-wage assessors, undermining the esteem and value of the apprenticeship brand.

Today, all that changes. The Apprenticeship Levy is born.

The Apprenticeship Levy

For those still waking up to the new reforms, from today, all employers with a wage bill over £3m will be paying a 0.5% payroll tax which can only be used to fund apprenticeship training.

If they ignore it, the lose the cash from their bottom line.

If they use it wisely, they can create talent development programmes across their business which may start to close that persistent productivity gap.

It is this seismic change which creates both unprecedented challenges and opportunities for the employers who will pay the Levy, and the education providers who can support them.

The challenge for employers

Businesses faced with Levy bills must find the right providers to deliver high quality, value-adding training which maximises their return on investment from the Levy.

Many will have little experience of employing apprentices or have only a limited number of roles in their organisation where traditional “technical” apprenticeships are relevant.

Corndel recommends that one of the best opportunities for investment is in the managers and leaders who drive business-wide productivity.

Under the Levy rules, it is not just entry level recruits that are eligible for training. Experienced managers can also complete funded workplace development programmes to improve their management and leadership capabilities.

There is a wealth of research evidence showing that investment in management training has a significant impact on productivity, and this case was made compellingly in a recent speech by the Deputy Governor of the Bank of England, Andy Haldane.

As a specialist leadership and management provider, Corndel offers both Level 3 diplomas for junior managers to drive team performance, and Level 5 diplomas to invest in future senior leaders. Both are fully fundable by the Levy.

The challenge for the apprenticeship provider market

Training organisations also face a challenge. The market is very mixed, with some notably good organisations such as Babington and Arch alongside a very long tail of “stack ‘em high, sell ‘em cheap” providers who have historically thrived in a market little concerned with quality.

That starts to change today as well.

The Apprenticeship Levy, and with it the Government requirement for companies to invest their cash in vocational education, will sweep across the apprenticeship market like a lighthouse beam

The providers who will thrive will be those who offer real quality and value to their customers. There will be no hiding place for poor provision in the new market.

The Corndel team founded the business last year because we realised that the quality of leadership and management training available fell far short of most businesses’ expectations.

Corndel is unashamedly investing in developing world-class business education programmes, creating exceptional curriculum content and headhunting outstanding coaches. We hope to send a very clear message about what we believe in, the value we create for our customers, and our determination to close that productivity gap.

So, as the Apprenticeship Levy is finally born, our hope is that companies seize the opportunity it offers, make best use of the funds they have, and invest in their talented employees who can make the biggest difference to their businesses.

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