Apprenticeship levy - keeping it local

With an ageing public sector workforce, we should be encouraging apprenticeships by passing the funding from the Apprenticeship Levy onto those public service employers who deliver quality apprenticeships.

 

This is Scottish Apprenticeship Week 2017, which focuses on the benefits apprenticeships bring to businesses, individuals and the Scottish economy - an opportunity to encourage more employers to offer quality apprenticeships. Events and activities involving employers, apprentices, colleges, local authorities and training providers are taking place across the country to celebrate the success of apprenticeships.

 

The UK wide Apprenticeship Levy is to be implemented from April 2017 and collected by the HMRC from large employers. Employers in England, including public sector bodies, will be able to directly access funding. However, in Scotland the money goes into the Scottish Government's budget - around £230m per annum.

 

Public sector employers in Scotland are important providers of quality apprenticeships. In a recent UNISON Scotland survey 81 per cent of apprentices described their training as excellent or good, even though almost half (46%) felt there should be a greater degree of off-the-job training. That is not to say there are not issues that need to be addressed. More than one in three (35%) rated their chances of achieving a job upon completion of their course as ‘don’t know’ or ‘unlikely’. Gender segregation also remains a huge issue. While the percentage of women employed in apprenticeships varied across councils, a strong pattern exists of women taking up apprenticeships in administration or care, while being almost completely absent from ‘craft’ apprenticeships.

 

Councils spend at least £25m on providing hundreds of valuable opportunities for young people such as modern apprenticeships, craft apprenticeships, graduate trainees, probationer teachers, formal work experience as employers that all contribute to the Developing Scotland’s Young Workforce (DYW) Programme, jointly led by the Scottish Government and local government as partners.  This major programme aims to reduce youth unemployment by 40 per cent by 2021.

 

However, in Scotland the apprenticeship levy resource is not being passed on to these providers. COSLA has estimated that, based on last year’s pay bill for councils, the Apprenticeship Levy could potentially cost local authorities £24m as employers. That could rise to almost £50m across the public sector in Scotland.

 

Originally, local government understood that it would have its Levy funding returned in full in the next financial year by the Scottish Government.  Then councils were told that they were not to receive any of their own funding back from the Scottish Government. This decision undermines the DYW Programme and efforts to reduce youth unemployment in Scotland by putting in danger the future of valuable local initiatives provided by councils and other public service employers for young people. 

 

The bottom line is that apprentice recruitment is not happening at a sufficient rate to either: alter the ageing demographic of the workforce in public services; or replace the numbers leaving the workforce through voluntary redundancy or early retirement.

 

By centralising funding, the Scottish Government is discouraging public service employers from taking on apprentices. It is time to think again and return this funding to those local employers who want to develop quality apprenticeship programmes.