‘Overcomplicated’ apprenticeship levy risks cutting employers and employees adrift

City professors call for increased flexibility to ensure best training for next generation of apprentices

Simplifying processes and increasing flexibility hold the key to unlocking the potential of the apprenticeship levy, according to leading academics.

The levy — which has funded apprenticeships in England since 2017 equivalent to 0.5 per cent of salary costs for companies with an annual wage bill of more than £3 million — has been criticised this week after it was revealed that UK employers had lost £2 billion in levy funds in the last two years. Any unspent money must be returned to the Treasury after that time.

The findings by the Chartered Institute of Personnel and Development, which represents human resource professionals, called on ministers to make wholesale reform of the current system which has been heavily impacted by the Covid-19 pandemic with fewer apprentices hired and an unwillingness to make long-term financial commitments.

This opinion is shared by two professors at the Business School (formerly Cass) who use levy funding for their courses. Professor Amit Nigam, Professor of Management, and Dr Amanda Goodall, Reader in Leadership, believe the levy could work effectively if there were less regulatory processes that allowed the employer more freedom to decide what works best for apprentices.

Balance can bring transparency and trust

Professor Nigam, Course Director for the Executive Masters in Leadership, thinks balance is key to ensuring transparency as businesses continue to support the government’s Levelling-Up agenda, as well as trust that employers and providers will use the funds in the right way.

“The apprenticeship levy is obsessed with accountability. This obsession leaves too little space for the discretion that employers and educational providers need to best develop and run effective apprenticeship training. Employers and the apprenticeships providers need some flexibility to truly do what is best for the apprentices’ training and career development, including being able to design training initiatives that would offer a true, substantive education.

“In addition, the levy should simplify the idiosyncratic and often, frankly, pointless focus on documentation. Any reform should be about simplifying and creating more space for discretion to focus on the substance rather than the letter of the law. This involves a different balance between accountability, given the use of public funds, and discretion on the part of employers and educational providers.

“Without a new balance, employers and the best educational providers will avoid the levy or withdraw from it over time.”  

Training opportunities should not be restricted

Dr Goodall, Course Director of the Executive Masters in Medical Leadership, said the teaching methods applied on the course directly affected doctors’ ability to lead during the Covid-19 pandemic. Yet, with investment in training for doctors cut and apprenticeship levy red tape restricting the extent to which businesses can offer training, apprentices and their employers are missing out.

“We train medical doctors in leadership and management, which has never been more important during the pandemic. We know from both doctors and their managers that their management learning is having a direct effect on their ability to lead during the pandemic. But sadly, the apprenticeship levy processes are massively overcomplicated, both for employers and employees.

“Doctors are the most time-restricted people in the country, and they are also among the most qualified. The Senior Leader standard, for professionals, has seen funding reduced from £18,000 to £14,000 for a high quality two-year Master’s programme, so why — when the world needs doctors as leaders like never before and the government claims to look after its exhausted clinicians — has investment in doctors training been cut?

“If the levy was less bureaucratic with flexibilities applied to documentation, training time off the job, and a relaxation around functional skills requirements, it could work really well.”

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