Mark Botha: The apprenticeship levy has its problems, but it would be wrong to decide that it has failed

Two and a half years after the apprenticeship levy was introduced, it’s easy to conclude that it isn’t working as the Government had intended or as employers had hoped. Investment in training hasn’t risen significantly, evidence of widespread productivity gains is patchy and overall apprenticeship numbers have fallen some way short of official expectations.

We have become accustomed to the steady parade of headlines in the press announcing the levy’s continued ability to disappoint. In July, a survey of employers for HR body CIPD found that confidence in the initiative had fallen. Businesses were particularly unhappy with the levy’s inflexibility, and its inability to compensate fully for the long-term decline in training investment, especially for small and medium-sized enterprises (SMEs).

Some believe that the levy has not lived up to expectations – but it would be wrong to say that it has failed. It is after all the biggest shake up in work-based training in years. Any overhaul attempted on this scale was bound to encounter its fair share of problems.

What’s more, this narrative of doom tends to ignore the positives. For example, the news that apprenticeship numbers actually started to rise at the beginning of the year, or the fact that apprenticeship recruitment is growing at a much faster rate than graduate hiring, or that some major employers like BT have doubled or even tripled the number of apprentices they train since the levy was introduced.

This is not to say that employers’ frustrations with the levy aren’t justified. But it is to argue that the picture is more mixed than critics allow.

To discover exactly what employers think of apprenticeships in general and training providers in particular, we at Paragon Skills commissioned pollsters YouGov to ask HR managers for their views, 30 months after the levy started. Some of the frustrations mentioned above were echoed in our poll. A third of businesses say there aren’t apprenticeships available to meet the needs of their business, while significant numbers complain that apprenticeships aren’t suitable – either because they don’t add to the skills colleagues already have or because providers haven’t been able to customise them sufficiently.

Some training providers, too, are a cause for concern. While most employers are happy with the service they received, a quarter, rising to two-fifths of large businesses, say they have been let down. One key issue is the quality of tutors, with a quarter of employers, rising to over a third of the largest employers, saying the overall quality of apprenticeship tutors is poor. Perhaps unsurprisingly, a similar proportion are thinking of switching their training provision to a new provider.

Interestingly, there are some significant differences between employers. Large businesses are generally both more critical and more aware of the potential benefits of apprenticeships. Perhaps as they have more invested in terms of employee time and business resource, they tend to be more aware of the upsides and downsides of any training programme. On the whole, all employers regardless of size say that the main benefits of apprenticeship training are better management of talent progression and succession planning, closely followed by better staff retention and an improvement in their organisation’s image with key stakeholders. Large employers also cite the increased flexibility demonstrated by those on apprenticeship programmes and the belief that they have induced fresh thinking and new ideas in employees.

Whatever the specific benefits, arguably the most striking finding from our survey is that employers are not only upbeat about apprenticeships in general but are also becoming increasingly positive. Most believe apprenticeships benefit business – with supporters outnumbering sceptics by almost 10:1. In fact, the number of employers who say that their business has become more positive about apprenticeships over the past 12 months outnumber those who disagree by a factor of 3:1. When we asked HR decision makers if they would have done an apprenticeship if an appropriate one had been available when they were training, two-fifths say they would have, and only a fifth disagreed.

Statistics, however, can only show part of the picture. In my opinion, nothing points to the potential of apprenticeships more than the stories of those who have experience of them. I can think of the nursing home training director who can testify to the wonders apprenticeships have done for staff turnover and retention. Or the management apprentice who feels more empowered to do his job, not least because he says his colleagues have more confidence in him. Or the retailer who says that since the levy was introduced, she has a waiting list of applicants wanting to do apprenticeships because both they and the company take them more seriously, whereas before fewer were interested and completion rates were poor.

Yes, the apprenticeship levy is far from ideal. Yes, employer frustrations are justified and where appropriate they should be acted upon. But for all their faults, apprenticeship programmes and the apprenticeship levy are a step in the right direction.

Interested in investing in apprentices? We recommend the Apprentices and School Leavers Conference 2019.