The Apprenticeship Levy and Higher Education

The Apprenticeship levy has been set by the Chancellor at 0.5% of payroll for employers in both the public and private sectors with a payroll of over £3m and all employers will receive an allowance of £15,000 to offset against payment of the levy. The Apprenticeship levy will be introduced in April 2017 and is expected to raise £3bn annually.  Employers will be able to recover their levy payments when they spend on Apprenticeship including Higher and Degree Apprenticeships.   Employers may well be able to reclaim more than they actually pay in levy.  Smaller employers will still be supported to deliver Apprenticeships.

Universities and colleges will want to explore a number of issues.

• Individual Learners – How the vocational higher education provision a university or college offers relates to and will support an individual gain the knowledge, skills and behaviours specified in an Apprenticeship Standard.  Learners will, of course, be employees.  How will an institution respond to individual demand for Higher and Degree Apprenticeships – where fees are paid by the employer and/or the state?  A job and salary from day one, no fees or debt (as fees are paid by the employer/state) and a degree (with a Degree Apprenticeship) will be a very attractive offer to potential HE students.  How will institutions position their provision?
• Employers – How HE provision developed for and funded by employers supports an individual gain the knowledge, skills and behaviours specified in an Apprenticeship Standard.  If it does an employer paying the levy will be able to reclaim levy funding for training provision provided by an HEI or FEC.  If it does not an employer will have to pay and will not be able to recover the levy.
• Universities and Colleges as Employers – How a university or college can recover the levy payments they make as employers by recruiting apprentices and funding their learning and development.  How will the Apprenticeship levy relate to staff recruitment and development?

UVAC predicts major changes in employer behaviour particularly in the public sector; health, social care, education etc.  Apprenticeship Standards are, of course, being developed in a very wide range of occupations in the private sector with substantial support from employers and professional bodies – how employers will respond is uncertain, but there could be major changes in behaviour.  Employers spending on training with HEIs and FECs will want to recover levy payments.  If an HEI or FEC doesn’t offer Apprenticeship provision an employer may well go elsewhere. Employer recruitment practices could change. Will there be a move from graduate recruitment to Apprenticeship recruitment at age 18/19?

UVAC can advise members on the above issues.  A summary of the support UVAC can provide is available here.