Taking stock of the Levy

EDM_LiLBlogHeaderWhere are we?

The evidence so far points to employers ‘wasting’ the Apprenticeship Levy - the most significant development in employer-led training yet seen - with more than £1 billion in funds left unspent already and rumours of the expenditure being written off as a tax. Just 8% of levy funds were spent in the first 10 months of the initiative.

At the same time, there have been organisations who have been able to capitalise on the levy opportunity in unexpected ways. Because ultimately, while the scheme is a piece of public policy aimed at addressing UK issues of productivity and growth, the burden of responsibility is centred on employers - their ambition, their energy, their imagination.

Listening to the market

From our experiences, at Cranfield School of Management, of listening to large employers, the reasons behind the levy caution are straightforward enough. The complexity is generally a problem. The number of standards now available is considerable, as are the burdens of compliance. Many organisations do not currently have the capabilities in place to adequately service the Apprenticeship Levy requirements, and these often require considerable investments in resources, processes and systems. Beyond this, there is the narrowness of the standards, only capturing certain job types adequately enough: mostly only those traditional  occupations that have remained largely unchanged for long periods (like carpenters, plumbers, nurses) or very general occupations (senior leaders). There’s little scope to accommodate new, flexible, more dynamic occupations that are less codifiable. So standards start to look like anchors in a world that requires continual adaptation; and, as a result, there appear to be relatively few employers interested in many of the standards available (despite the industry input into Trailblazer planning groups).

We shouldn’t, however, let teething problems with the mechanics cause the Apprenticeship Levy to break down. There have already been many benefits for the UK economy and employers - just with the 8% investment made so far. A core challenge for UK plc is poor management (leading to lost productivity valued at tens of billions of pounds each year according to bodies such as the Chartered Management Institute) - but the levy has already led to an upturn in general management programmes like the MBA. There’s been an increased emphasis on industry-university-professional body cooperation, galvanising activity and leading to more understanding and tailoring to specific needs.

Evolving partnerships

And we have seen this for ourselves at Cranfield, where we now have a number of master’s-level apprenticeships, which we call Masterships®. Working with Grant Thornton and the Chartered Management Institute, we were the first business school in the UK to offer an Executive MBA via the apprenticeship route. The knowledge we have learnt from this, our first Mastership, is serving us well in the development of other offerings in logistics and supply chain management, retail and digital banking and management and leadership. As we are learning, so are the companies and professional bodies that we are working with to create programmes that match their needs and the needs of their workforce.

Lessons have been learned from the first year of the levy, not just by ourselves, but by business, by the educators and by the professional bodies, and there just needs to be some tweaking to address criticisms that would allow the scheme to fly. Firstly, there is a need for a more flexible approach to using funds: re-positioning the Apprenticeship Levy as a ‘Training’ Levy and, implying a broader set of options for using funds; accommodating the dynamic and unknown nature of most future professions. There should be less emphasis on compliance with the new processes, and all the additional staff roles this demands, allowing organisations simply to align what they’re doing with existing professional development capabilities and systems. Most importantly, the standards need to be in tune with the future of work, more in line with new and next generations of rapidly-evolving and multi-faceted jobs.

In a world of change, the Apprenticeship Levy has looked a little flat-footed. Which is a real shame, as with some relatively minor tinkering, it can be a huge resource for making sure the UK keeps up in terms of professional development, collaboration and innovation.

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