The apprenticeship levy, set to be implemented in April 2017, remains surrounded by uncertainties, particularly regarding the usage of unused levy funds, co-investment requirements for non-contributing companies, and the possibility of expanding training provider options. Despite these challenges, the levy is seen as a positive development for employer investment in vocational training, which is crucial for addressing the UK’s productivity issues and skills gap.
A survey by Cairneagle Associates revealed that major skills shortages exist in fields such as engineering, health & social care, construction, and science & maths. The health & social care sector, despite growth in apprenticeship starts, faces ongoing challenges, particularly with apprenticeship success rates.
Concerns regarding the impact of the apprenticeship levy on long-term profitability highlight the complexities of pricing, cost of delivery, and customer acquisition. Despite these concerns, survey respondents largely believe that profitability will increase under the new system, especially since employers will be incentivized to use their levy funds or risk losing them.
The ongoing Area Reviews, aimed at improving financial stability for further education colleges, may lead to more opportunities for independent training providers. Despite mixed opinions on the effectiveness of the Area Reviews, many believe that independent providers will continue to grow due to their culture of innovation and ability to meet national companies’ needs.
Lastly, the article discusses the potential shift toward greater integration of vocational and corporate training, with some corporate training budgets being redirected to support the levy. Survey respondents believe that this trend will lead to an overall increase in training opportunities for large employers.
Read more here.
Author: Arun Kanwar (Partner)
