Tap into apprenticeship funding before it's lost

Running Your Business

Tap into apprenticeship funding before it's lost

By Adrian Grove

In May, apprenticeships minister Gillian Keegan, in a reply to a parliamentary question, said that £1 billion of apprenticeship funding “had expired between May 2020 and February 2021”. 

Huge amounts of funding – a total of £157 million in April 2021 alone – are being returned to Government coffers, when they could – and should – be used to develop and reinforce workforces in the wake of the pandemic. April’s figure marks the highest monthly amount to have ‘expired’ in the Government’s Apprenticeship Levy Fund since May 2019, when the transfer facility was established. 

There are now more than 700 apprenticeship standards to choose from – far more than there were just 10 years ago – including pharmacy assistants. Training new candidates in these essential roles, across both large companies and smaller organisations, is key to the UK’s future economy and scientific standing, so this is a staggering amount of money to lose when it is so desperately needed to address the current skills shortage.

Additionally, employers can utilise apprenticeship funding to help upskill support staff, including roles in customer services, administration, and team leadership. There are apprenticeship courses, such as customer service practitioner, HR support, project management, and chartered manager, which build skillsets applicable across industries.

Far fewer companies than the total using the apprenticeship levy seem to make use of the Levy Transfer option. The transfer is designed to allow levy-paying employers to transfer up to 25 per cent of their company apprenticeship levy payment to multiple employers. 

Sharing part of their levy total helps cover the costs of training in smaller companies. This might be an SME in their supply or research chain that might not have the resources to fund apprenticeships themselves, or perhaps a charity supported by the company which would benefit from taking on apprentices. The contribution a levy transfer can make to corporate social responsibility (CSR) or economic, social and governance (ESG) plans should not be underestimated. 

a vast number of SMEs simply do not know there are funds available for them to apply for

However, the fact remains that in the last two years alone, UK employers have lost £2bn in apprenticeship levy funds that they have been unable to spend. This represents a huge opportunity for SMEs, who can take advantage of the transfer as a ‘gift’. It is a chance to upskill and grow small business workforces from Level 2 upwards, at low expense. Given that SMEs take on around 60 per cent of total employment in the UK, it seems only right the leftover funding is directed at these companies to access the skills they need to grow.

So why aren’t SMEs jumping at the chance to get money for nothing?

The answer is twofold. Firstly, a vast number of SMEs simply do not know there are funds available for them to apply for. And lines of communication do not exist between large companies with excess levy and the smaller businesses or charities that could really benefit from additional apprenticeship funding. The reality is, however, that there are many large companies with unspent funds looking to connect with and transfer funds directly to SMEs. 

Secondly, many SME directors who are aware of the transfer option are wary about starting an apprenticeship programme because they perceive it to be too complicated, expensive or simply too overwhelming to manage with current workloads.

Transferring unused levy funds can be complicated and time consuming; it requires month on month action, so needs both time commitment and system training – activities that routinely get pushed aside for more pressing matters. However, because of its potential to boost productivity and profit, and the amount of money involved, the transfer option is too valuable to ignore.

Organisations like Qube Learning can help bridge that gap in communication and are able to support large companies and SMEs in connecting, transferring funds and delivering the apprenticeships that are needed by smaller firms. Reaching out to an accredited learning provider with proven experience in this area for help in finding a donor/recipient organisation is an easy way to unlock the potential this money could release – and prevent billions more being returned and the opportunity for growth wasted.

As we emerge from the 2020-21 global pandemic, it is more important than ever to invest in the UK’s future workforce. Apprenticeships, whether in large companies or SMEs, are vital to meet current demand for skilled professionals over a sustained period, supporting our economic recovery. 

It’s a golden opportunity that should not be wasted.

Adrian Grove is business development director at Qube Learning www.qube-learning.co.uk/levy-transfers

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