Major employers are being urged to rescue apprenticeship levy funds that are set to expire from the brink, by using them, or sharing them with local companies.
In a bid to shape the region’s future economic capabilities, unleash growth and create jobs – Alliance Manchester Business School is calling on organisations to review their skills needs as the first tranche of scheme payments, are set to expire in April 2019.
The imminent expiry of contributions leaves firms with a simple choice – either lose funds to the treasury – or use them as an opportunity to upskill.
Stuart Wells, Executive Director Client Relations at Alliance Manchester Business School said: “Confusion and criticism dominated the launch of the Apprenticeship Levy with large employers having to significantly readjust their processes to align with the structure. This means many simply haven’t had enough time to utilise all of the funds in their levy account to train staff.
“Organisations that quickly but thoroughly assess their skills and business needs, have fantastic opportunity to build their future capabilities and upskill, simply by utilising money that is presently set to be lost – thereby turning a negative into a positive as this region does best.”
Presently, more than £3bn of Apprenticeship Levy funds in England remain unused with just one in five levy-paying employers making apprenticeship commitments. This means organisations have been able to utilise just 14% of available cash.
Additional to the UK productivity limitations caused by skills shortages, findings from the Chartered Management Institute (CMI) indicate that 43% of UK managers are ineffective or highly ineffective.
If levy paying organisations struggle to spend money in their account, 10% of their annual funds can be transferred to third party organisations, with the amount increasing to 25% from April. Both companies need to be registered with the apprenticeship service in order to transfer or receive the funds.
Stuart continues: “The ability of organisations to share funds, could add fuel to regional growth. Just as the Northern Powerhouse led the UK in nurturing global connections and attracting inward investment from countries like China – the region has a unique opportunity to lead the way with skills – a fact that could positively impact growth, job creation and our entire region’s future readiness.
“The only thing we need to do to seize this unique opportunity to realise the immense benefits of training and upskilling is to collaborate and share – and that’s what we do best.”
Stuart concludes: “With the North West facing a skills and management shortfall – I would urge businesses to use or share expiring funds before it’s too late.”