Apprenticeship Funding – use it or lose it!

>Apprenticeship Funding – use it or lose it!
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Category: Apprenticeships Development Leadership
Published: 29th May 2019

A raft of new changes came into play for apprenticeship funding this April, a key one being that apprenticeship levy paying employers will now begin to see unspent funds from their pot withdrawn if they remain unused.

We’re finding this change, in particular, has become a catalyst for UK managing directors, finance directors and HR leads to really sit up and begin to find ways to take action.

And it’s certainly leading to some very interesting and fruitful conversations for the team and I at Raise the Bar over recent weeks.

It’s great to see that awareness is rising around how beneficial and cost-effective modern leadership apprenticeship programmes are today and, by working with the right partner, how simply they can be delivered and how impactful they can be for organisations of all shapes and sizes.

A little bit of history

It’s now more than two years since the levy was introduced in a bid to put funding control for apprenticeships into the hands of employers.

Put simply, the change means companies with annual wage bills above £3million pay an additional 0.5 per cent on top of their PAYE when their return is submitted each month.

That ring-fenced money for apprenticeships then accumulates for two years. However, from this April, if the two years have elapsed and they have not used anything from the pot they lose their first contributions month by month until they start using the money.

These changes to funding have hit the traditional funding contract holders, who’d delivered apprenticeship programmes under the old system the same way for years, really hard, but it also opened up a more competitive market.

But it’s also fair to say that passing accountability and responsibility for this to employers has caused a degree of confusion and uncertainty.

It has led to businesses questioning the value and reward of committing to apprenticeships because, for many, it had never been a consideration they’d needed to think about. The result is that only around 14% of the £3billion-plus pot this has raised over the last two years has been used by UK employers.

But I think this is largely because of the range of misconceptions about apprenticeships and the funding opportunities available which were – and to some extent still are – rife.

Mizuho International's 'Leading for Growth' Programme curated by Raise the Bar kicked off last week.

Busting the myths

At Raise the Bar, we’re forever busting myths around apprenticeships, so I thought it might be best to list them out so we can all begin to break them down for those eligible businesses across the UK. Please feel free to share them with whoever you know who will listen!

1. Apprenticeships are for school leavers, under 18s and new employees

This one is a really popular myth! And also, not true. Apprenticeships are perfect for existing staff with development needs.

Leadership apprenticeships like the ones we deliver can be used to drive incredible results across all levels of a business, they can be used to support people of all ages, at all levels of seniority or to plug key gaps in your existing leaders’ skills, knowledge or capabilities. If you’re reading this, you could be eligible too!

2. Apprenticeships are for developing technical skills

Partly true, but this also misses out a huge area of focus for many businesses, and that’s around leadership and management skills that we live and breathe at Raise the Bar. It’s our specialism, our focus, and the area where we add most value in this space.

Our experience means we can bring years of expertise to help businesses invest their levy pots in training and high-quality professional management qualifications for their next generation managers – or existing managers who want to develop their management skills.

Whether it’s a Level 3 Team Leader apprenticeship or a Level 5 Departmental Leader programme, we’re there to make sure it’s delivered simply, and ensuring every penny of the funding available is used to provide a wide range of engaging learning experiences and resources.

3. We can only use a traditional apprenticeship provider to work with us on this

Not true. The role of apprenticeship providers has changed. Providers must be approved on the Register of Apprenticeship Training Providers, as we are here, but the way the levy works means the choice is completely open. If you need a specialist learning and development provider to plug your leadership or management skills gaps, you can – and I’d say should! – work with us.

But choose wisely. Seek out a specialist learning and development company that focuses on driving the right outcomes and doesn’t simply licence ‘vanilla’ resources and content. Look for innovation and edge, someone who is going to drive value through the investment you’re making in your future leaders.

4. Apprenticeships are old fashioned

Some might be, but ours certainly aren’t!

Although there’s always a place for monthly workshops and face-to-face interactions; modern workers demand and expect a strong digital edge, so look for a provider that can deliver innovation, for example sharing content through an app; delivering inspiring webinars and coaching remotely; showcasing learning through videos, using augmented reality and virtual classrooms; curating great learning resources…I could go on.

5. My levy is pretty small, so probably not worth using

I hear this a lot. But again, this is one myth that needs clarifying…because it absolutely is worth using. In fact, the way the funding works really does benefit smaller and medium-sized organisations.

I say this because, once the levy is used, these types of businesses would still qualify for 95 per cent funding towards additional learners – yes, that means it would only require a 5 per cent contribution of the cost for programmes delivered beyond the resources available in a funding pot.

To give you an example the funding band maximum is £7,000 for a Level 5 Operational/Departmental Manager apprenticeship and, assuming this is the price of your selected programme, once your levy has been used you would only need to contribute £350 (plus VAT) to the cost for every additional learner. The other £6,650 would be fully funded!

6. Graduates can’t complete an apprenticeship

Wrong! Providing their degree is not in a directly comparable subject, and they have a related skills gap, they are eligible. Many graduates will not have studied leadership or management skills as part of their degree, and this makes a management apprenticeship a great opportunity to develop those skills!

7. It will mean I lose my best people for one day – or 20 per cent of the working week – for a while…

This one is true….but it does need clarification. It doesn’t require your learners to take one day out of the office per week for learning and can be stretched across a working week. A well-structured leadership and management programme, delivered innovatively, can reduce time spent away from the business. Who wants to travel to a musty old classroom regularly anyway?

But, equally, it really is an investment in your organisation and people who may have moved into a management role without having any training. It will deliver better leaders and stronger managers, which in turn are more likely to work smarter, collaborate more effectively and drive better results. I always say that the equivalent of one day a week today will be more than worth the investment tomorrow.

8. Apprenticeships are a bit naff aren’t they? No one in our organisation will be interested

I think the way some of the more traditional apprenticeship contracts have been delivered over the years have given the industry a bit of a bad name. So, you could say this is partly true!

But I’d encourage you to get in touch with us to see how we’re innovating in ways you wouldn’t believe.

I genuinely believe we’re shifting the dial for this industry and, when it comes to leadership and management apprenticeships, we’re changing the way the game is played.

If your new apprenticeship programme is launched well, delivered with class, and leads to top-level qualifications, believe me the results can be out of this world. And we can prove it through our own experience so far.

And once the rest of the company sees these impacts, you’ll have many more clambering to be part of the new wave of apprentices who could be the next generation of game-changers for your business.

Get in touch for a free consultation

I’m open to speaking to any organisation who is eligible for the apprenticeship levy, so if you’d like me to come over for a free consultation, to explain the benefits or debunk any concerns, then please get in touch at shaun@raisethebar.co.uk.

Shaun Lanceley

Director
Raise The Bar