WoE businesses are realising the potential of their unspent apprenticeship levy to drive local change

Author
Alex Richards
WTPN Operations Director & WEAS Programme Director | Business West
9th September 2021

Businesses in the West of England are pledging their unspent apprenticeship levy to a new scheme which is helping to drive apprenticeship engagement and job creation across the region. 

Alex Richards from Western Training Provider Network is our guest writer on the Apprenticeship levy share scheme.

Any business with payroll of over £3million pays the apprenticeship levy, a tax set by the government. What many businesses in the West of England don’t realise is that they are losing their unspent levy, when they actually have a chance to drive local impact with it. 

What happens to it, why is it unspent and how are local businesses like the Southern Coop, Bristol City Council and GKN Aerospace using it to support the local economy and their wider community initiatives?

For some large apprenticeship levy paying businesses their contribution to the apprenticeship levy is just too large to spend it all (it equates to 0.5% of a business’s monthly payroll). 

Whilst it was designed to fund apprenticeship opportunities for businesses, some businesses don’t hire many apprentices in their workforce, don’t need to recruit, or utilise graduates for their talent supply chain. 

It is estimated that between £4m-£8m goes back to the Treasury as unspent apprenticeship levy funds each year from West of England based businesses alone. If levy goes unspent, there is no guarantee that it will be returned to the regional economy in the form of apprenticeship funds. 

Regionally it means that a huge number of jobs and training opportunities are being lost each year in the West of England. Hiring apprentices offers valuable career opportunities to our residents; many of them younger people desperate to get on to a career ladder through a structured programme of training and development that an apprenticeship can offer.

But there is a way that employers can use the apprenticeship levy funds they accrue to make a positive regional impact and support their wider corporate responsibility objectives.

Up to 25% of unused levy funds accrued and not spent after two years can be gifted by the levy payer to other businesses in the West of England region through the Share to Support scheme. 

With small businesses making up a large portion of our local economy, there is a real demand for these businesses to receive funding support as they bounce back from the impacts of COVID-19. Local businesses are using the Share to Support scheme to gift their levy to small businesses, helping to cover the cost of their apprentice’s training.  

This funding support is helping to enhance the region’s skills offer; local small employers are able to create new career opportunities, add much needed capacity and address their current skills gaps.

Over £485,000 of unspent apprenticeship levy has already been pledged to the Share to Support scheme. The Southern Coop is the latest local employer to get involved in the scheme, pledging £50,000 of their apprenticeship levy:

Sarah Kavanagh, Business Transformation & HR Director at Southern Co-op, said: “There is a wealth of talent and enthusiasm across the south which we need to nurture and support. One way of doing this is through apprenticeships and the Share to Support apprenticeship levy scheme enables everyone to benefit from the apprenticeship levy regardless of the size of your employer. It’s a programme of co-operation with mutual benefits which we wholeheartedly support.”  

Generous benefactors such as Southern Co-op have a range of reasons why they have pledged to the Share to Support scheme. Some want to develop stronger links with their supply chain and enable them to hire apprentices, others just want this region to prosper with a highly skilled workforce and realise apprenticeships are a key solution in the skills/productivity puzzle. Other businesses are feeding this initiative into their wider corporate responsibility and community programmes and are keen to support certain sectors. 

A key sector being supported is the Health and Social Care sector. 

Bristol-based business, Able Care Homes recently received funding support from Bristol City Council through the scheme to fund 8 apprentices:

“The financial support made available through the Share to Support scheme has been key to allowing our team to go forward in developing their skills further within the Health & Social Care Sector. It has been a hard time in our sector maintaining a safe environment for all our vulnerable residents within the COVID pandemic, our staff team felt a sense of relief they could use an apprenticeship to continue growing their knowledge to be able to support our residents and our relatives loved ones.’

But finding the employers, understanding the transfer process, supporting these SME’s to take on or develop Apprentices can be a large task for the levy employer, more cost on top of their levy commitment. There is a solution though to this added admin.

The Western Training Provider Network (a regional ‘not for profit’ network of Apprenticeship training providers) has been commissioned by the West of England Combined Authority to run the Share to Support scheme. The initiative supports larger gifting businesses to develop a programme around their needs and helps to find local, small businesses to facilitate the gifting process.

The Western Training Provider Network also offers a free apprenticeship support service to help smaller employers navigate a complex apprenticeship landscape. 

If you are interested in understanding how your unspent levy could be used to make a difference to the region, then please get in touch or join us at this event: How can your business benefit from Apprenticeship Levy sharing? on 30th September 2021 to find out more.

You won’t be alone, some fantastic work is already underway with employers such as GKN Aerospace, Bristol City Council, Bath and North Somerset Council, Southern Coop and Midas getting involved. They are all helping our local employers build back better locally, support residents to develop skills, knowledge and careers and increase engagement with apprenticeships.

Alex Richards from Western Training Provider Network is our guest writer on the Apprenticeship levy share scheme.

SMEs in the West of England can access this funding and support delivered by the Western Training Provider Network via the Workforce for the Future programme (led by the West of England Combined Authority).

 

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