Unspent apprentice levy funds thwarting utility bid to address skills demand

A “significant under spend” of funds available under a government initiative to boost UK apprenticeships is thwarting water industry efforts to meet its growing demand for new, skilled workers according to a report by membership group, Energy & Utility Skills.

A funding gap predicted in the report, Test and Adjust should be meet by greater public funding coupled with lowering the payroll threshold to below £3m for employers who contribute to the Apprenticeship Levy according to its author, former chief of the National Apprentice Service, Professor David Way.

Based on an estimate the report found that only about two thirds of funds raised under the government’s Apprenticeship Levy was being spent on supporting apprenticeships, the report found that some £30m a year of utility company payments remained unspent. Most companies, according to the report, were recouping 20-50% of the levy paid and less than a quarter were recovering more than half of their levy payments.

However more that half of companies expected to increase their recovery their share of the levy in 2020.

“The Apprenticeship Levy has not yet had the transformational impact on employer investment in skills training that ministers were looking to achieve,” said Way (pictured) adding: “However, employers are now familiar with the systems and are steadily increasing the proportion of their levy payments that they are able to use.”

Energy & Utility Skills chief, Nick Ellins, said while the apprenticeship reforms behind the levy had brought “undeniable benefits” to utilities, a rethink was needed: “It is time to step back, draw breath, talk candidly, target the resources and efforts to maximum effect and use this insightful research to help apprenticeship policy progress to support the needs of the whole UK economy,”