Apprenticeships – the tipping point?

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Ask a dozen economists about the state of the global economy and you are likely to get 12 different answers. The same seems to be true of the Government’s campaign and incentive to create thousands of ‘new’ Apprenticeships nationwide. Some are talking up the scheme, especially those in the Tech sector who see the Apprenticeship Levy as addressing a critical skills shortage. Others are not so convinced.

In April, the Association of Employment and Learning Providers (AELP) put in a freedom of information request that discovered that £1.28 billion of the £1.39 billion paid by Levy paying employers is currently sitting unused. The AELP’s Chief Executive and Policy Director both expressed dismay at the calls from employment organisations such as the CBI that the Government should relax the levy and dilute it into more ‘general’ skills training.

The AELP is an unequivocal supporter of the levy and believes that for the foreseeable future the levy should be ring-fenced to fund only Apprenticeships. Its leaders are also exasperated by the misleading coverage given to the subject in the media and say that the levy could be a genuine ‘game changer’ in improving productivity, social mobility, and quality. In this we are agreed.

 

£1.39 billion paid by Levy paying employers is currently sitting unused

Disappointing numbers
The start numbers, though, have been disappointing, both nationally and specifically within our own industry. The Government has a target of creating 600,000 Apprenticeships by 2020, and the reforms have been criticised by various business groups not only for the cost but also the delays in approving new courses. This, they argue, has meant that many have not been able to spend their levy funds. According to Government reports, there are 261,200 Apprenticeship starts between August 2017 and March 2018, compared with 362,400 in the previous academic year – a decrease of more than a quarter (28 percent).

Our own experience also suggests that all is not quite right. Whilst we are having some great conversations with members, and some of these conversations are at last converting into real business, take up of our CSA Member Apprenticeship scheme has still been slow. It may be that the investment has been made with other providers, but even if that is the case then the numbers are still small. Given the size of our membership, and those who qualify for the levy, we estimate that more than £1 million is leaking from our industry.

Amidst all of this, however, is some positive news regarding what those outside of our industry are doing. Whereas CSA Member Apprenticeships may not have yet had the traction we anticipated within credit services, others have been quicker to recognise the value they can deliver. We now have more than 20 firms signed up to our Apprenticeships, coming from ‘big brand’ names across different industries such as insurance, food and beverage, and the public sector.

There was also more good news recently with the welcome announcement from the Department for Education that businesses are being allowed to share a proportion of their levy funding with another company.

Within the field of debt collection and consumer credit, a number of specific Apprenticeship standards have been created that are being offered and supported by the CSA. These range from the new standard in Credit Control through to the most advanced Senior Compliance/Risk Specialist Apprenticeship standard, and every point in between.

Levy sharing
Since May, all levy-paying firms have been able to share up to 10% of their levy with one other company or organisation of their choosing. This could be in support of their supply chain (e.g in our case it could be a debt buyer supporting a member of their contingency collections ‘panel’), or to support their wider Corporate Social Responsibility (CSR) agenda, enabling Apprenticeship opportunities for other businesses and individuals who might not otherwise be funded.

Whether you are a levy-paying business who is not able to spend all your levy, or a non-paying business who wishes to join a CSA Member Apprenticeship programme, we believe this is good news for our industry. What is particularly exciting is that any non-levy paying firms who access Apprenticeship funding this way will then not be required to pay a 10% contribution, which means a ‘win-win’ for all parties concerned. It will be interesting to see how this news is received, and whether it acts as a catalyst for those who have yet to embrace the Apprenticeships’ initiative to finally take action.

I sense we are at a tipping point where both time and patience are fast running out. Big names from the world of industry are already calling for reform, and some that the Levy should be scrapped altogether. That would be a great shame. The next few months, however, may be critical.

 

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The Credit Services Association (CSA) is the only National Association in the UK for organisations active in the debt collection and purchase industry. The Association, which has a history dating back to 1906, has 300 member companies which represent 90% of the industry, and employ 11,000 people. At any one time its members hold up to £60 billion for collection, returning nearly £3 billion in collections to the UK economy per annum. As the voice of the collections industry, our vision is to build confidence in debt collection by making the entire process clear, easy to understand and less stressful for all those involved. Further information on the CSA can be found at: http://www.csa-uk.com

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