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  4. Apprenticeship accounts have £1.28 billion stockpiled, OU analysis reveals

Apprenticeship accounts have £1.28 billion stockpiled, OU analysis reveals

The apprenticeship levy: one year on report cover

More than £1.28 billion of the funding that has been paid into the apprenticeship levy is still sitting in National Apprenticeship Service accounts, new data analysis commissioned by The Open University (OU) has found.

The analysis revealed employers in England have withdrawn just £108m of the £1.39 billion they have paid into the apprenticeship levy.

Pick up the pace

Analysis of data from the Education and Skills Funding Agency – acquired through a Freedom of Information Act request – has found that one year on from the introduction of the apprenticeship levy, organisations have paid in more than £1.39 billion but only withdrawn £108 million. Employers are now being warned to "pick up the pace" or face losing up to £139m per month - from April 2019 - that could be spent on building reskilling and upskilling their workforce and securing their organisation for the future.

This slow start could cost organisations in England dearly, as any funding that remains in their National Apprenticeship Service accounts after 24 months will expire. It is a case of use it or lose it.

Our report The Apprenticeship Levy: One Year On, shows why employers should begin investing in the levy, if they haven’t done so already. The money can be put towards overcoming the notable national skills shortage and employee attrition through the development of both soft and hard skills and increase of workplace efficiency which could lead to becoming an employer of choice and attracting and retaining a highly skilled workforce.

The report suggests that it can take up to nine months to get an apprenticeship programme up and running. Furthermore, according to market research commissioned for the report, three in 10 (30%) business leaders who have accessed the funding said that the process was more time consuming than they expected, so employers need to ensure they do not underestimate the time required.

Even though the majority (92%) of levy-paying organisations agree with the apprenticeship levy in principle, more than two in five (43%) would like to see some changes, as there are a number of barriers that are deterring employers from taking up apprenticeships.

The call for flexible learning

Employers are concerned about the resource required to develop an apprenticeship strategy (15%) and to research providers and programmes (16%). One in 10 (11%) even said that management of the apprenticeship process requires resource equivalent to a full-time job; a cost they simply cannot afford.

However, the most significant barrier preventing organisations from taking up apprenticeships is the availability and flexibility of programmes. One in four (24%) business leaders agreed that apprenticeship standards – which define programme content – need to be approved more quickly by the Institute for Apprenticeships, as the current delays limit the training options available to them.

David Willett, Corporate Director at The Open University, said:

“While it’s encouraging that the majority of business leaders agree with the levy in principle, it’s clear that adjustments are needed to make the levy work harder for employers.

The lack of flexibility needs to be urgently addressed to ensure that organisations get value for money, and we think that modular apprenticeships, which allow organisations to develop tailor-made programmes that fit their specific needs, could be an attractive solution for both employers and the UK government.”

To read in full the impact that the apprenticeship levy has had upon organisations and their workforces so far, download The Apprenticeship Levy: One Year On report here.

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