The Open University has published a report on the first year of the Apprenticeship Levy, welcoming the Levy’s intent to increase investment in skills and training, but making a number of recommendations for how it believes the Levy could be improved.

Freedom of Information data has revealed that, while more than 50,000 organisations across the UK have contributed to the apprenticeship levy since its introduction, at a total cost of £1.8bn, organisations in England have only withdrawn £108 million – just eight per cent of the £1.39bn they have paid in.

The report highlights a number of the concerns that employers have with the Apprenticeship Levy and its implementation. These include the time-consuming nature of the process, as well as the fact that in can take a significant amount of time to set up apprenticeship programmes, in the knowledge that, from April 2019, organisations will begin to lose unspent funds still in their accounts. Other barriers include the availability and flexibility of apprenticeship programmes, and the speed at which apprenticeship standards are being agreed, as well as the costs associated with the hiring of an apprentice that cannot be covered by Levy funds.

The Open University’s report also suggests an alternative system, which would introduce ‘modular apprenticeships’, which are tailor-made to organisations’ needs and fit alongside existing training programmes. These modular apprenticeships could allow students to pick and choose modules to build a qualification that suits their skills or training requirements. Employers could pick modules relevant to the specific organisational knowledge required, adding other soft skills or digital skills their organisation lacks. This might particularly benefit SMEs, whose needs are often quite different from the larger organisations that have generally designed the apprenticeship standards.

CTG has continued to express concerns about how practical it will be for many charities to utilise their levy contributions fully. A year into the scheme we would welcome feedback from charities on their experiences so far to info@charitytaxgroup.org.uk.