Re-thinking apprenticeships
Drew Thomas finds that the rapid expansion of degree apprenticeships is allowing learners, employers and universities to rethink higher level vocation
Posted by Rebecca Paddick | August 10, 2017 | Students
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The growth in degree apprenticeships has, to a large extent, coincided with the announcement in the Summer Budget of 2015, and introduction in April 2017, of the apprenticeship levy for England’s 22,000 employers with an annual pay bill in excess of £3m. This year the levy will inject £2.7bn into England’s publicly-funded workforce development.

At the same time, Government has embarked on an ambitious programme of apprenticeship reform, driving the development of new apprenticeship standards, a large proportion of which are at levels four, five, six and seven. It can be no surprise therefore that many universities are expanding their degree apprenticeship offers at levels 6 and 7 and seeking to position these with levy-paying employers.

The majority of these employers are considering how best to re-coup their levy; a smaller number are also identifying how to take advantage of the Government’s current offer to meet 90 per cent of the costs of additional apprenticeship training once an employer’s levy funds are exhausted. With the levy collected by HMRC, this is typically capturing the interest of the Finance Director as much as, if not more than, the HR and Organisation Development teams.

Many large, levy-paying employers are looking to re-engineer the way they recruit and develop talent via levy-funded training 

A recent CBI/Pearson Education survey reported that 83 per cent of employers are now involved in apprenticeships (up from 71 per cent) and two-thirds of respondents plan to reconfigure workforce development strategies to accommodate apprenticeships; almost a quarter expect to reduce graduate recruitment. Despite such medium term-intentions, Government data indicates that employer engagement with the levy is yet to accelerate: by May 2017 only 8,200 of the 22,000 employers had registered their apprenticeship service accounts. This is a surprisingly slow take-up: employers have 24 months to use each month’s levy payment, or lose the resource to HMRC.

On the other hand, this slow take-up undoubtedly reflects two factors. First, the scale of thinking required in a relatively short space of time by large employers, who historically have had less engagement with apprenticeships than SMEs. Many large, levy-paying employers are looking to re-engineer the way they recruit and develop talent via levy-funded training (new recruits and existing staff can access levy-funded training). Second, the need to meaningfully plan deployment of the levy amongst the very sector promoting it – the public sector. We estimate that the public sector will need to have in the region of 336,000 new or existing employees starting apprenticeship training before March 2021 if it is to meet the Government’s stretching target of 2.3% of public employees to be pursuing eligible training.

Henley Business School’s approach is driven by the enormous new investment in workforce training that the levy represents, as well as the strong shift to employer ownership and changes in how young people consider their options for achieving level 6 and 7 programmes. However, we are primarily interested in how the levy, and the much wider set of apprenticeship reforms, provide an opportunity to work with existing and new employer clients to improve organisational productivity. Although there are now signs that employers are investing more in workforce training, the levy was conceived following a decline in employers’ investment since the late 1990s. 

In less than a year we have worked to develop and bring to market our first programmes that will ultimately form our portfolio of services. Of equal importance has been establishing a model with employers that positions their organisational strategy and associated operational challenges at the centre of workforce development, capitalising upon the opportunities of carefully deployed levy funding. This has required new ways of thinking and working, melding government policy and funding with diverse employer requirements and Henley’s pedagogical approach. To complete our offer we have identified, and will continue to seek, partners that can co-deliver complementary provision and synchronised systems.

All of this has required careful project management and planning as well as a long-term commitment to managing return on what is a significant investment. For the Business School, our clients and the nation’s productivity challenge, this is an investment we believe to be thoroughly justified. 

Drew Thomas is Apprenticeship Adviser to Henley Business School.