How is the apprenticeship levy being adopted by the public sector?
The apprenticeship levy has the potential to provide the public sector with a great opportunity to upskill its workforce. But reaping the full benefits is a complex feat that organisations need better support with.
Following its introduction in April 2017, the apprenticeship levy has been accumulating funds for investment in apprenticeships within UK businesses that spend over £3m on payroll each year – the levy stands at 0.5% of an organisation’s annual pay bill.
Due to the vast nature of the public sector, organisations such as local authorities, who employ a large workforce across multiple departments, are accruing a significant sum of money to invest in both new staff and their existing workforce.
Funds which accrue are ring fenced for two years and, following this, start to exit the isolated accounts and filter into government funds where they are inaccessible to the business which has accrued them.
As such, businesses that started paying the levy when it was introduced will see funds from those initial months filter out of their account from April 2019 and the overall funds will stagnate if they are not utilised for training opportunities.
As April 2019 approaches, there has been an increased realisation across the sector that businesses must seek to understand how they can utilise the funds being held for them and implement the relevant processes that will enable them to take advantage of the training opportunities available to them.
Organisations across the public sector are managing their commitment to apprenticeships in different ways, with some appointing dedicated roles to manage the programmes and others utilising and upskilling existing colleagues to deliver apprenticeships with the support of external suppliers.
Supporting the public sector
If organisations are looking to better understand and benefit from the levy, taking a procurement route will help them meet their internal apprenticeship targets, as well as those set by central government.
In addition to providing different opportunities for recruiting suppliers, a key consideration for organisations when reviewing procurement routes is how to educate team members who are seeking to understand the most valuable way to develop their programme.
For organisational staff who are developing apprenticeship programmes alongside existing roles, the new Standards approach has required some additional thinking.
The number of statistics, targets and ways in which the apprenticeship criteria is reviewed is continually evolving, meaning regular education should be a priority.
A particular area that is challenging the traditional thinking in some organisations is the change from Frameworks to Standards.
Apprenticeship Frameworks and Standards
Apprenticeship Frameworks provided criteria that the apprenticeship was required to meet and was easily understood due to its tick-box nature. In the run up to 2020, Frameworks are being replaced with Standards, which are much more person-centred and provide a less quantitative approach to managing apprenticeships.
In addition to being more person-centred, Standards are employer-led and developed by employers to ensure that employees and new staff are gaining skills in the required areas.
Each Standard covers a job-specific role and sets out the knowledge, skills and behaviours an apprentice will need to be competent in within their role in order to meet the needs of employers in the sector.
For organisational staff who are developing apprenticeship programmes alongside existing roles, the new Standards approach has required some additional thinking and understanding of the resource involved in the apprenticeship levy implementation.
In the long term it is expected to offer greater opportunities for apprentices, but from an organisational perspective it requires more processes and a better understanding of the different ways in which individuals learn and improve their skills base.
There also remains a misconception that apprenticeships are only open to young people out of employment, which has meant that some organisations have not immediately understood the full benefits of the apprenticeship levy. Each organisation’s levy pot is available to use for any potential or actual employee if they are a UK resident.
The amount of funds available to the apprenticeships is variable dependent on the sector and role. For example, there is £3,000 available across twelve months for an Adult Care Worker apprenticeship at Level 2 whereas there is £24,000 available across three years for a Police Constable apprenticeship, which results in a degree.
The role of Trailblazing Groups
When it comes to the Standards and funding for the varying roles being confirmed, it’s a Trailblazing Group that proposes banding and criteria for the standards based on the courses that have been available in the past across a variety of providers.
It has taken time for many organisations to understand the benefit of the apprenticeship levy and consider the best way in which to implement it in their organisation
The Education and Skills Funding Agency (ESFA) then review the proposals from the Trailblazing Group and either approve, reject or amend the funding amount that will be available for individuals undertaking an apprenticeship in that role.
It has taken time for many organisations to understand the benefit of the apprenticeship levy and consider the best way in which to implement it in their organisation. The number of uptakes to date has been variable, but with increased support available we expect organisations to become more confident in their approach and to see an increase in apprenticeships across the public sector.
A key consideration for public sector organisations during this time, especially if they have got to grips with their own apprenticeship programme processes, will be if they wish to spend more on apprenticeships than is in their isolated pot.
While on the outset this might seem counterintuitive, the government has announced that any organisations who overspend on apprenticeships will only have to contribute 10% of the overspend costs.
So, for example, if the police force overspent by two apprenticeships, rather than pay the full cost of £48,000 they would only have to pay £4,800. This is a significant saving for any organisation and public sector organisations are arguably best placed to take full advantage of this feature of the apprenticeship levy.
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As Category Manager for Corporate Services at YPO I develop and manage procurement frameworks that support our customers needs across a wide range of services. A key focus for me in 2018 has been developing the Apprenticeship Framework which has been created to support public sector organisations in utilising the funds that they are accruing...