More than £1.28bn in UK apprenticeship levy funds remain unspent More than £1.28bn in UK apprenticeship levy funds remain unspent

More than £1.28bn in UK apprenticeship levy funds remain unspent
17 Apr 2018

More than £1.28 billion (US$1.83 billion) paid by employers into the apprenticeship levy is sitting unspent in National Apprenticeship Service (NAS) accounts.

According to an analysis commissioned by The Open University (OU), organisations have paid in more than £1.39 billion (US$1.98 billion) but have withdrawn a mere £108 million (US$154 million).

But any funding that remains in their NAS accounts will expire after 24 months. This means that if organisations in England continue in the same vein, they risk losing as much as £139 million (US$198 million) a month from April 2019, the report concluded.

But Simon Ashworth, chief policy officer at the Association of Employment and Learning Providers, told People Management that levy-payers know there is a two-year funding window. 

"We don’t recognise the gloomy picture that this report paints and remain convinced that the levy will be a success," he said. "Our training provider members tell us that the levy-payers they are supporting are well aware of the two-year window in which to utilise their funding, and are strategically planning the roll-out of their apprenticeship programmes accordingly."

The report also revealed that three out of 10 business leaders who have accessed the funding said the process was more time-consuming than they expected. Moreover, even though 92% of levy-paying organisations agree with it in principle, 43% would like to see some changes, according to HR Magazine.

But employers are also concerned about the resources required to develop an apprenticeship strategy (15%) and to research providers and programmes (16%). One in 10 said that managing the apprenticeship process requires resources equivalent to a full-time job - a cost they simply cannot afford.

The rigidity of the levy was also found to be another major concern, with one in three calling for more flexibility being allowed in terms of apprenticeship content. In response, the OU is calling for the introduction of 'modular apprenticeships', which enable employers to tailor training by adding additional learning modules to ‘core’ apprenticeships.

Emma

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

More than £1.28 billion (US$1.83 billion) paid by employers into the apprenticeship levy is sitting unspent in National Apprenticeship Service (NAS) accounts.

According to an analysis commissioned by The Open University (OU), organisations have paid in more than £1.39 billion (US$1.98 billion) but have withdrawn a mere £108 million (US$154 million).

But any funding that remains in their NAS accounts will expire after 24 months. This means that if organisations in England continue in the same vein, they risk losing as much as £139 million (US$198 million) a month from April 2019, the report concluded.

But Simon Ashworth, chief policy officer at the Association of Employment and Learning Providers, told People Management that levy-payers know there is a two-year funding window. 

"We don’t recognise the gloomy picture that this report paints and remain convinced that the levy will be a success," he said. "Our training provider members tell us that the levy-payers they are supporting are well aware of the two-year window in which to utilise their funding, and are strategically planning the roll-out of their apprenticeship programmes accordingly."

The report also revealed that three out of 10 business leaders who have accessed the funding said the process was more time-consuming than they expected. Moreover, even though 92% of levy-paying organisations agree with it in principle, 43% would like to see some changes, according to HR Magazine.

But employers are also concerned about the resources required to develop an apprenticeship strategy (15%) and to research providers and programmes (16%). One in 10 said that managing the apprenticeship process requires resources equivalent to a full-time job - a cost they simply cannot afford.

The rigidity of the levy was also found to be another major concern, with one in three calling for more flexibility being allowed in terms of apprenticeship content. In response, the OU is calling for the introduction of 'modular apprenticeships', which enable employers to tailor training by adding additional learning modules to ‘core’ apprenticeships.

Emma

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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