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The Apprenticeship Levy: helping fulfil the needs of employers

The Apprenticeship Levy is almost upon us. Mark Farrar explains its implications and outlines the advantages apprenticeships can bring

April 2017

The apprenticeship levy is nearly here. As of 6 April, all employers who have an annual pay bill of at least £3 million will be required to invest in apprenticeships, through a charge of 0.5% against their annual pay bill.
AAT has long since known the value of apprenticeships to the UK economy – indeed, many of you reading this right now may have initially come across our qualifications as a result of the apprenticeship you undertook. But it seems that more people, as well as recruiters, are increasingly looking to play an active role in the apprenticeship scheme, according to our recent study Apprenticeships: Getting ahead for accelerated ambitions.
One in two young people aged 16-18 who are still at school told us that they are considering an apprenticeship as their route into employment. And just under half of people aged 22-30 who had already completed a degree said they too may do an apprenticeship in the future, if the circumstances were right – for example, to help facilitate a change of career. A good reminder to us all that apprenticeships aren’t just for school leavers.
Recruitment experts also had praise for the apprenticeship scheme. Just over half told AAT that apprentices taken on in the past five years had performed better than those with a degree (compared with just 5% who thought the other way round). And three-quarters believe more young people will choose university alternatives such as apprenticeships over the next five years, with two in three saying this will affect the way they recruit new staff.
Yet for some employers, confusion still reigns over the coming policy changes. According to a City and Guilds survey last month, one-third of companies who are eligible to pay the levy weren’t even aware of its existence. Rather worryingly, the City and Guilds survey added that almost a quarter of Heads of Apprenticeships were not aware of the new apprenticeship system!
But where there is doubt there is opportunity. In accountancy, the new ‘Trailblazer’ apprenticeship standards will help employers gain access to a wider talent pool that they can develop and grow for themselves. And employer engagement will help improve the quality of apprenticeships overall, with AAT pleased to play its part as an Apprentice Assessment Organisation (AAO), delivering End Point Assessments (EPAs) in accountancy that allow apprentices to demonstrate their competence.
Approximately 20% of AAT’s 80,000 student base are currently engaged on an apprenticeship programme, and as an AAO we’re in the process of talking with existing AAT training providers and other organisations to see if they’d like to be registered to facilitate AAT’s EPAs.
Ultimately, we believe the new apprenticeship levy is a good thing for British businesses, as long as it is focused on high-quality apprenticeships that will help drive up productivity and ensure British business has the skillsets it needs to compete on a global stage.
Accounting technician students may have a part to play too in helping apprenticeship schemes improve for the benefit of employers and employees in the future. If you’re coming through such a scheme yourself, you will be well positioned to pass on your own findings around what worked for you, and any areas where you believe the scheme could be improved.
• Mark Farrar is Chief Executive of the Association of Accounting Technicians

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