Millions of pounds of Apprenticeship Levy money, aimed at increasing the vocational skills of the nation, is apparently going unused by businesses.
According to new research by Evolve Learning Group Ltd and West London College, only one in three (32%) of employers who qualify for the levy are taking advantage of it to train new and existing staff, suggesting that much of the levy is going untapped.
This is despite strong evidence that employers are finding it difficult to recruit staff with the right skills: 90% of employers agreed they find it somewhat problematic to recruit individuals with the right skills for their business; 21% said that it was extremely problematic.
“Businesses are missing a trick,” said Garry Phillips, CEO of West London College. “By not tapping into the levy companies are passing up on the opportunity to improve existing staff skills and bring new employees on board.”
Although some businesses have managed to take advantage of the levy, the survey shows there is still a level of confusion: three-quarters (78%) agree that more needs to be done to increase understanding of the apprenticeship levy’s value; four in five (80%) agree that more needs to be done to engage businesses to use the levy. Only 37% fully understand the levy and how it could help their business
Referring to the time limit of two years to use their levy payments, Stuart Rowberry, resourcing & development business partner, OCS Group (UK) Ltd, said, “I think many businesses are confused about how to use the levy, but with a limited period of time in which to invest the money, these businesses need to take action now or the money will be gone.
“I think one of the issues is that businesses have just seen the levy as a means of training new staff. They are also a great way to upskill existing staff so they can take on more responsibility and develop their careers.”
Despite not taking full advantage of the levy, businesses appeared positive about its benefits. Two in five (39%) have seen an increase in the number of candidates applying for vacancies. Nearly a third of businesses (31%) reported an increase in the number of candidates hired.
Two in five (38%) reported that it had increased the overall skills of their workforce.
When asked if looking to launch an apprenticeship programme in the next six months, nearly two thirds (65%) of employers said they would chose to do so via a further education college and a third (34%) through a private training provider.
Samantha Hurley, Director of Operations at the Association of Professional Staffing Companies (APSCo), said, “APSCo’s criticism of the way in which the Apprenticeship Levy is collected and used has been well documented, and these latest findings seem to highlight further flaws in the way the initiative has been implemented.
“As the only trade body dedicated to representing the professional recruitment sector we, of course, realise the value of vocational training, and broadly support measures to pipeline future talent both within the staffing sector and beyond. However, unless employers are offered more support around the Levy, the initiative will ultimately fail in its objectives.
“West London College’s Chief Executive, Garry Phillips, points out that he doesn’t think there is any business that wouldn’t want to get the 10% government ‘top up’ back on their investment. However, if small recruiters which are already spending 0.5% of their annual ‘payroll’ on apprenticeships are to benefit from the scheme at all, there must be more clarity around how they can make the Levy work for them – and approved standards would be a good start.”