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Don't fear the Apprenticeship Levy

The Apprenticeship Levy is a big beast coming our way, but can provide great opportunities if you prepare now

Posted by Stephanie Broad | October 14, 2016 | People, policy, politics

By Lee Povah

To many employers, it feels as though the Apprenticeship Levy has been sprung upon them from nowhere, creating unnecessary uncertainty. Whilst the private sector has been trawling through the detail of the levy to figure out its implications for their operations, there has been a distinct lack of awareness of its impending arrival or its potential impact in the public sector. Nowhere has this been more the case than for Multi-Academy Trusts (MATs), which face a pressing need to get to grips with the reforms as we move ever closer to the levy’s implementation next April.

Two rapidly approaching policy changes impact upon MATs within the wider schools system; firstly, public sector apprenticeship targets and secondly; the apprenticeship levy. The first means that MATs with a headcount over 250, which is the majority of MATs, will be expected to employ 2.3% of their workforce as apprentices. This is a pretty seismic shift – a back of the napkin estimate suggests an MAT that employs 250 people will need to employ at least 6 apprentices as part of this figure. However an MAT with a head count this small is rare. The largest will need to be employing around 130 apprentices – at a conservative estimate. This is all part of the Government’s efforts to visibly demonstrate the public sector are playing their part in meeting the target of 3 million apprenticeship starts by 2020.

The second policy impacting upon MATs is the Government’s main funding mechanism to support their ambitious target – the Apprenticeship Levy. So how does it work? Every employer, private sector or not, with a total annual pay bill of over £3m will be required to pay a levy of 0.5% of their payroll costs. The levy will be made available for MATs to spend on apprentices through a digital account. There will also be a 10% top-up to the levy meaning MATs can get back more than they pay in if they recruit enough apprentices. While many big businesses could swallow this cost, it is clear the levy will hit MATs hard. 

With six months to go, there is quite a transition for MATs to make – over 100 will have a levy spend over £30,000, 25 will have one over £100,000, half of this 25 will have over £200,000 and one will have over £1million. The situation is clearly urgent – the cost of not being prepared will be wasted money and lost opportunity. Why? If unspent, funds in the digital account expire after 18 months - so the incentive to be organised is clear. Schools must seek help NOW to ensure this does not happen.

Many are unaware of what an apprentice can be employed to do in a school and importantly, how their progression can be supported. This seems to be driving inertia in schools for hiring apprentices. The truth is they can be taken on in many capacities, including as teaching assistants, PE and school sports technicians and ICT technicians, among other roles.

Take teaching assistants as a case in point: there are hundreds of thousands employed in our schools but with huge variations in qualification attainment. So, we are faced with a situation; a clear need to upgrade the skills of existing teaching assistant staff and a need for MATs to hit apprenticeship targets and utilise their levy funds. We know the direction of travel for all non-degree skills procurement will be in the form of apprenticeships, so the incoming levy funds are a perfect way to meet targets by transitioning existing staff onto high quality apprenticeship pathways.

With public sector apprenticeship targets and the apprenticeship levy approaching, schools and academies need to act soon. Whilst these policies may seem like a burden and poorly thought out, once you scrape beneath the surface opportunities begin to emerge.

Lee is the Director and Co-Founder of National Schools Training, the leading provider of apprenticeships to schools and academies across the country. NST are providing free consultancy to schools on how to spend their apprenticeship levy. You can find out more about National Schools Training at www.nationalschoolstraining.co.uk.

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