By Mark Chillingworth
Remove the risk from the apprentice levy by developing existing members of staff, CIOs and CTOs are advised in this week’s Horizon Business Innovation podcast. Kate Temple-Brown, an expert on the apprentice levy with experience at organisations such as builders wholesalers Travis Perkins as well Deutsche Bank and the Bank of England tells the Horizon podcast that there are opportunities and challenges for CIOs when the apprentice levy comes into force on April 6, 2017.
Launching next week, the apprentice levy means that any organisation with a payroll of over £3 million must pay into the levy.
“In the 2016 Budget the government launched the idea of an apprentice levy, where organisations would have to allocate 1.5% of their wage bill that can only be spent on training and development,” Temple-Brown explains. “The brilliant thing is as well as the stick of the levy, they made several reforms on what an apprenticeship was, compared to the vocational training of the past.”
As of April 6, 2017 organisations can now place any member of the organisation, at any age and at any level within the organisation on an apprenticeship as long as that apprenticeship is longer than 12 months and one day and is provided by an accredited provider. Temple-Brown adds that the new apprenticeship levy is more generous than previous iterations with employers only paying in £1 for every £10 spent on training, an improvement of £7.
For CIOs and CTOs the apprentice levy is a boon too, she says, as the government has engineered the apprentice levy to focus on providing technology training.
“The change in technology over the last few years has been very fast. A lot of CIOs that I talk to have great cultural fit in their teams, but they struggle to keep up with the all the training for innovation…so this could expand the skillset of the population of your organisation and you can future proof the people you have in the organisation,” she says. Adding: “The government has used their funding bands to direct the attractiveness of STEM subjects.
“We as a country really need to make sure that we have a more tech savvy population, as we are really struggling to fill those gaps and to encourage school children to come into organisations and follow robust career paths in technology,” Temple-Brown says.
Training has suffered in enterprises across the UK, organisations have instead used easy access to talent from across the European Union and beyond, which has greatly benefited the recruitment sector. Temple-Brown hopes that the apprentice levy will be an “opportunity to put training at the heart of strategic conversations” in the enterprise.
Although hopeful, Temple-Brown says there are some worrying levels of poor leadership from the Conservative government on the apprentice levy and as a result organisations are wary of the latest initiative.
“The difficulty is that the government has been very vague in every aspect of the apprentice levy. HMRC will take payments from your bottom line on 6 April 17; the difficulty is that in order to make the most of the apprentice levy you will need to understand the digital apprentice system, a portal that is very complex, it is also complex to work out how you pay training providers and gather the 15k immediate payment form the government,” she says.
Worrying for CIOs is that it unclear whether as a business technology leader you can recruit an apprentice who has studied computing. Many CIOs have shared with Horizon that students graduating with computer science degrees are keen but lack the skills a CIO requires and therefore need some further training.
“The government is quite vague and we are still waiting for clarity on what a ‘same’ degree sounds like,” she says of the wording around same. “So if you did computer science at university you may not be able to do an apprentice masters, we don’t know that and we are waiting for clarity. It will probably be based on a drill down on the modules, so if there is more than 50 or 60% of the same then you can’t get the accreditation or funding for it.”
There is concern amongst the CIO and training community that the government is in fact using the apprentice levy as a stealth tax.
“There is a real possibility that they don’t want the organisations to maximise their levy payments from the apprentice levy as they need the money themselves,” Temple-Brown says.
“The first thing to look at when spending your levy is not to think of just school leavers. If you as an organisation have never hired a school leaver don’t start now. There will be a huge spike in hiring them from the organisations that are experienced at it and what to double their intake,”
“Historically the government has put £2.4bn into apprenticeships, which they have now stopped hoping that the £3bn (raised from levy) will replace that, but if every organisation maximises their levy they are only putting in 10%, if you are Tesco and your levy pot is £42m, it will be difficult to spend all of that money and the government are hoping the majority of it will come back to them.
“At the risk of sounding like a conspiracy theorist there is some vagueness from government with a view to not encourage organisations not spending all of the money. It will be interesting if there are any fences on what they can send the money on once it is dissolved and has gone back to the government, at the moment there is no clarity,” she says.
“We don’t have enough teachers or assessors and a training advisor cannot assess themselves, so the key for an organisation is to partner with the right training provider. There is a register that was launched in March that features 1,240 providers, the list is very lightly curated and uses Ofsted ranking and Ofsted is not well considered by the business community,” Temple-Brown says of the schools assessment body.
Temple-Brown is currently advising a wide range of organisations on the apprentice levy. She advises organisations to consider carefully what they want new or existing staff to learn. The training and development expert says she has seen examples of training organisations taking over the apprenticeship scheme for organisations and not really understanding the needs of the apprentices or the organisation they are working for; a story that has chilling similarities to failed outsourcing contracts.
“The first thing to look at when spending your levy is not to think of just school leavers. If you as an organisation have never hired a school leaver don’t start now. There will be a huge spike in hiring them from the organisations that are experienced at it and what to double their intake,” she says.
“Start with a small pilot in an area that is used to training, which is why technology is a perfect example and when you have a good news story about existing employees on an apprentice scheme you can grow,” Temple-Brown says, adding that organisations have 24 months to act.
Interestingly there are no penalties for non-compliance. Temple-Brown says that the risk is in reputational damage for having the opportunity to do something positive and failing to do so. But the advisor says organisations, despite the problems with the levy, should be taking advantage of it.
“Now is the time to look at training and development, we are seeing the impact of Brexit in logistics there is a driver crisis with 200,000 too few drivers than we need as the East European drivers have gone home and we need to start on developing our own people if we want to close the skills gap.” The driver shortfall that business leaders in retail and logistics have shared with Horizon.
“The apprentice levy will land differently in different cultures and different organisations. When organisations embrace the levy they will be having a wider discussion with all employees who want to broaden their skills so they are more internally mobile, I realise that is quite aspirational,” she says. Temple-Brown urges technologists to lobby their CIOs and CTOs to be on the receiving end of the apprentice levy.
Horizon met with Temple-Brown in the days leading up to the Conservatives triggering Article 50 to leave the European Union. The recruitment and training expert says that Brexit has caused problems for the implementation of the apprentice levy.
“Brexit has side blinded everyone in-particular large matrix organisations that are dependent on European imports, but now with it being days away some organisations are realising that they must do something.”
To ask Kate Temple-Brown a question contact her at: linkedin.com/in/kate-temple-brown-03a4b08