Apprenticeships Levy Consultation response form

Transcription

1 Apprenticeships Levy Consultation response form The department may, in accordance with the Code of Practice on Access to Government Information, make available, on public request, individual responses. The closing date for this consultation is 2 October You can also reply to this consultation online at: Please return completed forms to: apprenticeshipslevyconsultation@bis.gsi.gov.uk or: Apprenticeships Levy Consultation Department for Business, Innovation and Skills Spur 2 Level 2 1 Victoria Street London SW1H 0ET

2 What is your name? Seth Williams What is your address? What is your job title? Assistant Director, Head of Public Affairs When responding please state whether you are responding as an individual or representing the views of an organisation. I am responding as an individual I am responding on behalf of an organisation If you are responding on behalf of an organisation, please make it clear who the organisation represents by selecting the appropriate interest group on the consultation form and, where applicable, how the views of members were assembled.

3 The Association of British Insurers What is the name of your organisation? X Business representative organisation/trade body Central government Charity or social enterprise Individual Employer (over 250 staff) Employer (50 to 250 staff) Employer (10 to 49 staff) Employer (up to 9 staff) Legal representative Local Government Trade union or staff association Further Education college Private training provider University Professional body Awarding organisation Other (please describe) Where are you based? England Wales Scotlandrthern Ireland UK wide

4 If you are responding as an employer, which sector of the economy are you in? Agriculture, forestry & fishing Energy & water Manufacturing Construction Distribution, hotels & restaurants Transport & communication X Banking, finance & insurance etc Public admin, education & health Other services

5 Consultation questions Paying the levy 1. Should a proportion of the apprenticeship funding raised from larger companies be used to support apprenticeship training by smaller companies that have not paid the levy? Yes No We believe it is important to establish the levy pool before making a decision on this. Giving time to the new system to bed in and assess its effectiveness for those that have paid the levy will be necessary before making a judgement on whether it should be extended to those who have not paid the levy. 2. Do you have any comments on the proposed mechanism for collecting the levy via PAYE? Yes Primarily that it should be simple and that costs associated with it should be minimal including any consequent IT spend. 3. In your opinion, how should the size of firm paying the levy be calculated? Given this measure is about the workforce, the levy should be calculated on the basis of the number of full time staff, as opposed to other measures such as turnover or payroll bill. Existing and previous apprentices or those who have benefited from graduate training programmes - within a company s workforce should not count towards the calculation of the levy.

6 4. Should employers be able to spend their apprenticeship funding on training for apprentices that are not their employees? Yes Employers should be able to make decisions on where the funding is spent and with whom, in line with their own business requirements. The spending on training could include apprentices who are not employees directly. For example, insurers invest significantly in other industries and this could be taken into account. Employers operating across the UK 5. How should the England operations of employers operating across the UK be identified? The English postal address of the employee would seem to be the most pertinent information, with appropriate safeguards to ensure the system can be robustly protected from any attempt to game the system. Allowing employers to get back more than they put in 6. How long should employers have to use their levy funding before it expires? 1 year 2 years Other (please state in comments below) Given that apprenticeship schemes can last longer than two years, it would not be appropriate to introduce a limit of one or two years. The cut-off should correlate to the longest programme which we believe to be four years. 7. Do you have any other view on how this part of the system should work?

7 We are concerned that those large employers in the industry that have already made meaningful investment in apprentices and have taken a lead in setting industry standards, such as under the trailblazer scheme, may end up being negatively impacted by the introduction of a levy. Training costs are not the only costs associated with paying for apprentices. Salary costs alone are significant and the imposition of a further levy for training purposes may constrain the ability or appetite of some firms to expand their apprenticeship quota further. At the same time, cultivation of a strong apprenticeship offering cannot just be about the social good and has to be rooted in the skills requirement of individual firms and sectors. Clearly, business sectors vary considerably in their requirements and there is a strong argument for making the proposed levy sector specific. There is considerable difference between the needs of the construction industry and financial services in apprenticeship terms, and within financial services there are strong differences again; for example insurance is reliant on specialist skills in underwriting and actuarial science, and similarly insurance companies do not have networks of branch stores that are prevalent in the banking sector. There is a significant risk that the insurance sector will contribute more to the levy pot than it takes out. The sector is not characterised by low level and high volume apprenticeships, as other sectors are. Therefore, we should ensure the new system meets the needs of individual sectors. The Government has set an inspiring target of 3 million apprenticeships by 2020 but the unintended consequence of this should not be an influx of lowlevel apprenticeships to meet a quota, or deterring existing good practice from developing further. 8. Do you agree that there should be a limit on the amount that individual employer s voucher accounts can be topped up? Yes

8 Consideration needs to be given between achieving the global apprenticeship target and ensuring that the apprenticeship training provided is meaningful and required. Introducing a limit may lessen the appetite of companies who would otherwise want to commit fully to the new apprenticeship framework. 9. How do you think this limit should be calculated? n/a 10. What should we do to support employers who want to take on more apprentices than their levy funding plus any top ups will pay for? Employers who commit to take on a more apprentices above their levy funding should be incentivised with a discount for future levy years. The levy is fair 11. How can we sure that the levy supports the development of high-quality apprenticeship provision? The new industry-led trailblazer scheme should achieve this goal but needs to be supported by continued engagement from all stakeholders and reviewed on an effective basis. 12. How should these ceilings be set, and reviewed over time?

9 n/a 13. How best can we engage employers in the creation and wider operation of the apprenticeship levy? The Government should consult widely with business on an individual basis and through trade and professional bodies. Government should also ensure that its communications with business is clear, effective and timely once the outcome of this consultation is known, particularly on feasibility and in relation to any implementation timelines. Giving employers real control 14. Does the potential model enable employers to easily and simply access their funding for apprenticeship training? Yes It is not possible to answer this fully without further information, but anything other than this would be a bad outcome. The new system should be as simple and easy for companies to implement as possible. 15. Should we maintain the arrangement of having lead providers or should employers have the option to work directly with multiple providers and take this lead role themselves if they choose to do so? Yes

10 Flexibility in the system including on choice of provider should represent a benefit for employers, empowering them to meet their own business needs on an individual basis. This may not be appropriate for all sectors. 16. If employers take on the lead role themselves what checks should we build in to the system to give other contributing employers assurance that the levy is being used to deliver high quality legitimate apprenticeship training? We would expect any training providers used to meet a recognised level of quality assurance and to be registered appropriately. 17. Should training providers that can receive levy funding have to be registered and/or be subject to some form of approval or inspection? Yes Training providers should absolutely be required to register, and within a robust framework of oversight, reporting and inspection. 18. If providers aren t subject to approval and inspection, what checks should we build in to the system to give contributing employers assurance that the levy is being used to deliver high quality legitimate apprenticeship training?

11 n/a 19. What other factors should we take into account in order to maximise value for money and prevent abuse? n/a

12 The levy is simple 20. How should the new system best support the interests of year olds and their employers? Any extra support for employers taking on 16-18yr olds should be retained in the new system. 21. Do you agree that apprenticeship levy funding should only be used to pay for the direct costs of apprenticeship training and assessment? Yes The levy could also be used for costs outside of direct training and assessment of apprentices, not extending to salary costs. For example, attracting and selecting apprentices, including traineeships, represents substantial investment from employers. 22. If not, what else would you want vouchers to be able to be used for and how would spending be controlled or audited to ensure the overall system remains fair? n/a 23. Are there any other issues we should consider for the design and implementation of the levy that haven t been covered by the consultation questions we have asked you? Yes

13 There needs to be consideration about how the levy will work with the devolved administrations. For instance, if the levy is UK based then it will need to be decided how the proportion of the fund will be allocated for apprenticeship delivery outside of England. Do you have any other comments that might aid the consultation process as a whole? Please use this space for any general comments that you may have, comments on the layout of this consultation would also be welcomed. We have significant concerns about the proposed levy and would welcome further early clarity on the scope and scale. Nevertheless, in designing the new system the Government should seek to ensure that firms already engaged in apprenticeships are incentivised to grow their offering on the basis of needs and skills shortage; and that the new system does not penalise sectors such as insurance on the basis that the volume of apprenticeships required or possible, may be considerably disproportionately smaller than the sector s financial contribution to the levy pot. Thank you for taking the time to let us have your views. We do not intend to acknowledge receipt of individual responses unless you tick the box below. Please acknowledge this reply At BIS we carry out our research on many different topics and consultations. As your views are valuable to us, would it be okay if we were to contact you again from time to time either for research or to send through consultation documents? Yes