North East companies with annual payroll costs in excess of £3m are being urged to use their apprenticeship levy funding sooner rather than later following a new report that states more than £1.28 billion is languishing in companies’ service accounts nationally.
Northumberland College, which works closely with local organisations to deliver apprenticeship training across all industries, is asking North East companies who have contributed 0.5% of their annual wage bill to the levy to act now and use the funding available to take on new apprentices, or retrain existing staff, following data acquired by the Open University from the Education and Skills Funding Agency.
The report, named The Apprenticeship Levy: One Year On, highlights that only £108 million of levy funds have been used nationally meaning that the majority of North East companies have not yet withdrawn the cash they have paid in. If this continues at the same rate, it is predicted that organisations in England risk losing as much as £139 million a month from April 2019 as each company has only 24 months from the date of payment to access their levy fund.
In a document published back in August 2016, the Department for Education (DfE) had initially anticipated more than 19,000 companies, or 1.3% of all employers, would pay into the levy fund during 2017-18, generating approximately £2.7 billion. This meant that the average levy-paying employer would pay an average of £140,000 into their account.
Susan Goldstein, Director of Apprenticeship Academy at Northumberland College, commented, "Whilst the uptake nationally has been below the Government's initial expectations, the College is seeing a rising number of enquiries from organisations, not only in Northumberland but also further afield, looking at apprenticeships for recruitment and development purposes. Certain areas of the North East will have more levy-paying companies than others, however this report highlights the need for organisations, regardless of their location or sector, to look at the training funds available to them and use it to their benefit rather than letting it go to waste.
"Apprenticeships offer tremendous opportunities for employers to develop the knowledge and skills of their staff and attract energetic and motivated new employees. Our Business Training Solutions team is well placed to support such companies looking at the apprenticeship levy as a means of business growth or consolidation. We're here to help them develop programmes that best suit their requirements as well as fill any skills gaps that may exist and hopefully the statistics released by the Open University will make more employers sit up, get in touch and ultimately use the fund."
The College's Business Training Solutions team has become the first point of contact for many local companies looking to recruit via apprenticeships rather than more traditional, often costly and time consuming methods such as advertising or third party agencies. They have seen a rising number of clients using the levy fund for this purpose and this latest report could see more take up this option as an alternative recruitment solution.
Susan added, "The levy fund provides a very cost-effective means of hiring and developing individuals to enhance business growth through apprenticeships and many now see it as an alternative, more efficient means of appointing staff. It has worked very well for our clients, whether it be to increase employee numbers or retrain existing personnel in new areas of the business and develop their skills set.
"There are many benefits to taking this approach, notably cost savings, and with our added support, the levy has given these employers a real return on investment whilst increasing efficiency and promoting growth. Employers who recruit and retain a 16-18 year old apprentice are also entitled to a £1,000 incentive payment, or for 19-24 year old apprentices, an Education, Health and Care (EHC) plan. This is paid in two instalments by the training provider - £500 after a three months qualifying period and £500 after 12 months.
"The team here at Business Training Solutions has been able to enhance the skills and personal development of many young people in employment who now play an integral role in their respective companies."
Levy-paying organisations have two years to use their funding after which it will expire.
North East companies looking for more information or wishing to discuss apprenticeship opportunities should contact Northumberland College's Business Training Solutions on t: 01670 841268, e: firstname.lastname@example.org or go to www.businessts.co.uk/apprenticeships.