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Apprenticeship Levy and Modern Apprentices

Guest Blogger:
Alison Christie, Policy & Development Officer (Workforce)

The Apprenticeship Levy was announced by the UK Government at Summer Budget 2015, and at Autumn Statement 2015 it was announced that it would come into effect in April 2017. The Apprenticeship Levy will be a levy on all UK employers to fund new apprenticeships and will affect all sectors. The levy will be paid on annual paybills in excess of £3 million.

In Scotland it is estimated around eighty Third Sector employers, from SCVO research on 2013 figures, will be impacted by the levy; the majority of them providing social care. Almost half are members of CCPS or voluntary sector providers.

How will the Levy work?

The £221 million from the UK Government will be used by the Scottish Government, as part of the overall Scottish budget, to support skills, training and employment provision including the Modern Apprenticeship programme. The money is not additional monies but replaces what the Scottish Government would have previously received as a share of the UK apprenticeship spend. Scottish Government will continue to allocate funding to Skills Development Scotland to manage the Modern Apprenticeship Programme. The programme will:

  • Expand the number of Modern Apprenticeship opportunities to 30, 000 by 2020
  • Increase the number of Foundation Level and Graduate Level Apprenticeships during 2017/18
  • Increase the number of Frameworks that can be supported for Apprentices over 25 years of age
  • £10m Workforce Development Fund

Workforce Development Fund
The fund has been introduced to provide employers with workforce development training to up-skill and re-skill their existing workforce and is due to come into effect from autumn 2017. The fund will also address the skills gaps and training needs of older workers where an apprenticeship might not be appropriate. The fund will be developed with the input of employers through the industry led SAAB, Colleges Scotland and the Scottish Funding Council.

 

Scottish Apprenticeship Advisory Board (SAAB)
The setup of the Advisory Board comes at an important time for apprenticeships with the introduction of the levy from April 2017. SAAB will play a key role in advising on the use and fulfilment of the levy in Scotland which meets industry demand.

The purpose of the Board is to provide employer leadership and contribution to the development of apprenticeships in Scotland ensuring they are aligned with economic and industry need, Fair Work and job opportunities. It will be responsible for providing advice and making recommendations on the guiding principles, operational policy, systems and structures supporting apprenticeships in Scotland.

The Board will consist of 4 groups each with a specific remit; the Group Board, Employer Engagement Group, Employer Equalities Group, Framework and Standards Group.

How can organisations recoup their Levy contribution?

Questions have arisen as to how organisations can recoup the money they pay to the Levy. In England organisations will be given a digital voucher where they can track their money but the money is not ring-fenced in this way in Scotland. Under the system operating in Scotland it may not be possible for organisations to recoup the full amount paid to the Levy. UK wide organisations will not be able to use their vouchers in Scotland.

To ensure voluntary sector employers gain maximum benefit from their levy contribution organisations will need to participate in the Modern Apprenticeship programme which has more than eighty different types of Modern Apprenticeship. The contribution from Skills Development Scotland will support training however employers will still be responsible for wages (but not employer Class 1 National Insurance contributions if the person is under 25). The programme can be used to employ new staff and also be used to upskill existing staff.

For more information on the MA programme and the support and resources available visit Skills Development Scotland

Challenges for providers

  • The Levy in Scotland has not created a fund for providers to access as has happened in England and Wales;
  • The voluntary sector workforce is in general aged over 25 years and therefore the sector cannot benefit greatly from Modern Apprenticeships;
  • Concerns that charitable monies from donations and fundraising activities will be used to support non-charitable activity particularly supporting apprenticeships in commerce.

CCPS action so far

CCPS has been working closely with SCVO to address some of the issues arising, to look at how the sector can benefit most from the Apprenticeship Programme and to identify potential routes to influence the development of the Apprenticeship Programme. This work is ongoing and updates will be provided as available. The current activities are highlighted below:

  • Queries sent to HMRC on some of the issues raised by CCPS members (awaiting one response)
  • Meeting with Skills Development Scotland to identify how the sector can benefit from the programme
  • Discussions with SSSC to identify areas of influence
  • Meeting with Scottish Federation of Housing Associations (SFHA) to identify areas of common interest
  • Discussion with OSCR to identify potential areas of support
  • Meeting with providers to identify positive interaction with the Programme

Future action

CCPS will continue to work with SCVO and SFHA and liaise with SSSC and SDS. Information is being gathered on the activity of the SAAB groups, the financial contribution the sector makes to the economy and the activity some organisations are involved with to mitigate some of the costs associated with the Levy. Ongoing action includes:

  • Continue to engage with HMRC for a response to our query of an exemption for charitable monies used to pay staff costs;
  • Work with SCVO to present a case to SDS for increased sector representation on the Advisory Board
  • Support SSSC with information gathering on the impact of the levy on the sector and identifying organisations benefitting from the Apprenticeship Programme
  • Share information on the Apprenticeship Programme
  • Consider a joint sector request to Scottish Government for clarity on the levy funding and future developments

At present there is limited information available on how the sector can gain benefit from their levy contribution. CCPS will continue to work with partners and provide updates to members as this progresses.

If anyone would like to comment, contribute or discuss the Apprenticeship Levy and the Apprenticeship Programme please contact Alison Christie: Alison.Christie@ccpscotland.org

 

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