Robey’s Blog: Why SMEs should pay attention to the Apprenticeship Levy

I didn’t pay much attention to news of the Apprenticeship Levy.  I knew it was happening, of course.  But I wasn’t very interested.  The levy is a tax on businesses that applies to any business with a wage bill of £3m or more – I should be so lucky, I thought, and moved on to the next thing.

But at the HRD Summit in January I happened to fall into conversation with Chris, from AO who had recently taken on responsibility for his organization’s apprentices and his unbridled enthusiasm for the levy, given that he was from an organization that would be paying it, took me somewhat aback.  Over coffee, he waxed lyrical about the effect that the levy would have on changing the perception of apprenticeships, giving them the equal (but different) status alongside undergraduate degrees that they deserved, and about how much more diverse and specialized he expected them to become.  I started thinking I might have missed something important but, unfortunately, there was only so much one man could manage, and despite several firms with things to say about apprenticeships were there at the event, I didn’t get to follow up Chris’s endorsement at the time.  So it was with great interest that I responded to an inquiry wondering if I would like to talk to Ben Rowlands, CEO at Arch Apprenticeships, about the levy.  Why yes, I said, I definitely would.

Arch is part of the Blenheim Chalcot Group, who describe themselves as “venture builders”.  Their approach is not just to plough money into promising new start-ups, but to invest training, skills and experience alongside it and, as such, over the last few years they managed to acquire something of an unintended expertise in up-skilling workforces, from which grew Arch, who specialise in graduate and apprenticeship programmes in digital technology: a field that has traditionally be poorly served by the majority of training providers working in apprenticeships.

Although Chris had already warmed me up to Ben’s argument, I was still sceptical.  I’ve worked with apprentices and apprenticeship providers for some years and although I had a lot of faith in the concept, I wasn’t persuaded that the Levy was really going to change anything for the SME or charity sectors.  Ben was quick to set me straight.

“The programmes being created now are nothing like the old YTS schemes.  Even until recently, the best programmes were still being defined by what the provider could deliver.  The shift now is towards what employers are demanding.  Selection for apprenticeships is becoming more demanding.  The expectation of progress is becoming more rigorous; and end-point assessment is no longer the nod-through it once was.

“Problems with apprenticeships have arisen because Line Managers weren’t really aware of what apprentices where doing when they went to college and assessors didn’t have any practical insight into what apprentices were doing at work except for what they added to their evidence portfolio.  But the model that’s transforming this is much more collaborative and it’s built around online technology like Hive.”

Hive is an online learning portfolio, championed by Sir Clive Woodward, with which I happen to already be familiar, having been in its beta test last year.  It’s a tool that allows a learner to create a dialogue with mentors, advisors, contacts and fellow learners so that the content, instead of being fixed and isolated, like a traditional learning portfolio, is a dynamic environment.  If, like me, you are something of a casual learner then it’s probably not the solution you’re looking for.  However, if learning is a major part of your life, it’s a remarkable tool as long as everyone in your learning circle is au fait with how to use it.  Ben is clearly a convert and, in the context of apprenticeships in digital media, the good fit is obvious.

But when it comes to SMEs, Ben is keen to make another important point – about cost.

“Historically, SMEs have expected apprenticeships to come free – at least free of course fees.  But it’s really time for that to end.  Providers have been stacking up apprenticeships for under-18s, for which they get 100% funding, and using them to write-off the costs of older apprentices.  But it’s led to bad habits: poor quality in course assessment being just one.”

Always with one eye on issues affecting older people, I noted that the lack of upper age restrictions on apprenticeships meant that they could be attractive for older people returning to work after a bereavement, perhaps, or looking to re-skill when faced with a shortfall in pension income, and Ben agreed.

“We should anticipate that although apprenticeships will probably still mostly be school leavers and younger people, the number of mid-career apprentices, returners from career breaks or later life apprentices is only going to go up.  And as these don’t enjoy the same level of government subsidy, it’s going to become even less easy for providers to subsidize their course fees whilst delivering really high quality learning.

“But the sorts of qualifications apprentices are going to have access to – in Accountancy, Marketing, HR or Law, just to name a few – would normally cost employers thousands of pounds.  When you take that into account, getting the same skills for only hundreds of pounds, is a good investment by any measure.

“The nature of SMEs is that they often end up with ‘accidental experts’ – people who’ve come into the business through all sorts of routes and by chance and temperament ended up as the go-to in some business-critical field.  Apprenticeships are a perfect way not only to recognize and reward that sort of expertise with a qualification but, by investing in a structured course, it incentivizes these essential employees to stick around.”

Whether Ben’s argument about cost is enough to overcome the notoriously parsimonious gatekeepers of the purse strings remains to be seen, but with better quality programmes, more diversity meaning a better fit to business needs, and a more rigorous schedule of selection, testing and assessment, it seems like the profile of apprenticeships is set to rise in the UK.  Whether teachers and parents can be persuaded to see them as viable alternatives to a degree for their children, I can’t say.  But as a pathway to new skills and opportunities for older workers, they seem an ideal fit.  We could just be seeing the first sparks of a later-life learning boom.

Author: editorialassistant

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