Letter to Robert Halfon, Skills Minister
Author: Jill Whittaker
As independent training providers we have always been the first people that our clients turn to when they are trying to make sense of changes to apprenticeships or apprenticeship funding.
Between us, we deliver 76% of England's apprenticeships. I work hard at keeping my ear to the ground - being well informed matters. Yet here we are at the beginning of our new SFA contract year and I have to say I almost don't dare answer many of the questions that are being raised for fear it'll all change!
This morning I was talking to a large client who traditionally takes on a significant number of apprentices in January, and has done so for years. They understand that under the new apprenticeship standards they are required to make cash contributions, and had assumed they'd be able to use their apprenticeship levy payments to offset their cash contributions for existing apprentices as well as new ones post-levy. They were shocked to find that won't be the case. "But that means we'll be paying twice!" was the cry - and of course, they are right. So, they've decided that this year's intake of apprentices will be delayed until April (or whenever the levy comes in). I'm sure they're not the only ones. Have you considered the impact that this could have on apprenticeship numbers? And the impact further delays in levy announcements might have?
I was with another client last week, and they asked me what the employer contribution would be for the new apprenticeship standards. I told them that it's currently 1/3rd but there was talk of that changing for SMEs and non-levy payers. "To what?". Good question: we've all heard talk of a 10% employer contribution, and no contribution for 16-18s. I have apprentices in business administration and IT in my company, and I'm thinking twice before committing to a 1/3rd contribution given it could change to 10%, or even less, very soon. I can't blame my clients for thinking the same way.
Robert, I'd like to welcome you to your new role. You seem like a chap who is properly committed to apprenticeships and someone who understands the benefits to both the apprentice and the business who employs them. You'll make a great minister and I look forward to working with you. But I have a plea.
Once you've got your feet under the table, for goodness sake please tell us what you are planning to do with employer cash contributions and when the levy is coming in. And please tell us soon. It's not necessarily the percentage nor the date that matters, it's not knowing. Because businesses need certainty and if they are going to invest in apprenticeships they need to know that an investment today will not lead to them being out of pocket tomorrow.
HIT Training has recently launched The Apprenticeship Levy Handbook – an essential tool to support operators through the change in legislation.
Please click here to download your copy.