Local Employers Receive Apprenticeship Levy Transfer BoostMember News
West Yorkshire centred engineering apprenticeship training provider, Appris has brokered a deal with modular building specialist Portakabin to receive apprenticeship levy transfer funding for 11 engineering apprentices who are employed with other businesses.
Government funding rules state that levy-paying employers can ‘transfer’ up to 25% of any annual unspent monies to ‘receiving’ SMEs who need support funding their apprentices. Levy paying employers can transfer these unused funds to any number of receiving employers, but there are strict criteria to adhere to. In the time of the transfer scheme inception in April 2018 to the beginning of August 2019, there have only been 920 commitments for apprenticeship starts
The often-controversial apprenticeship levy was introduced in April 2017 to help the government reach a target of 3 million apprenticeships by 2020, a figure that the government admits will not be met. It applies to companies with a paybill higher than £3 million pounds and levies them 0.5% of their paybill, which they can use for apprenticeships only.
Skills minister, Anne Milton recently revealed the total balance of employers’ apprenticeship service accounts was £2.7 billion as of the end of September. The Department for Education said that £370 million of this had been drawn down, amounting to 13.7 per cent since the policy was introduced in April 2017. As per levy rules, big businesses who pay into the pot have a 24-month limit to spend their funds. Once that time is up, the funds will expire on a month-by-month basis.
In this instance, Portakabin was approached by Appris to step in.
Amanda Stainton, HR Director, Portakabin comments: “All of these businesses are Yorkshire-based, non-levy paying employers, which means we get the opportunity to fund their apprentices.
“Thanks to being able to transfer our remaining levy, we are able to secure more apprenticeships in Yorkshire and support British-based manufacturing. Over four years we will support 11 apprentices working across a variety of engineering and mechanical skills.”
“We are also supporting the Leeds City Region Enterprise Partnership (LEP) by highlighting to other apprenticeship-levy paying businesses to make the most of unspent levy funds and consider supporting training opportunities across their local communities through a levy transfer.”
The decision to fund and support these up-and-coming engineers came about after Appris’ government funds diminished to the point that they could no longer support local SMEs, even though employers had taken on apprentices through Appris’ recruitment process to begin their training programme. Kenny Stoddart, Operations Director at Appris explains, “Many apprenticeship providers around the UK are in a similar situation with regards to limited funding for non-levy organisations. With employers already committed to recruiting young people, Appris has agreed to fund a further 15 apprentices as part of our charitable remit. This equates to £300,000 lost revenue, but we are dedicated to supporting regional SMEs and young people towards solid careers in the region’s priority sector.”The local engineering and manufacturing businesses benefitting from this transfer are EJOT UK in Sherburn-in-Elmet, Olicana in Ilkley, WITT Group in Halifax and The Bright Screw Company in Rodley. The responses from all these businesses has been overwhelming relief and gratitude to Portakabin and Appris in enabling their sustainability and growth.
Appris has just invested a further £1million to build another engineering training centre on the same Laisterdyke site as they built their first back in 2014. This building will accommodate further mechanical engineering students and be the home to a custom-built fabrication and welding workshop. Dean Coleman-Walker, Business Development Director at Appris clarifies the need for the expansion, “Our apprenticeship intake has risen by 50% since last year and this new addition is a much-needed boost for local engineering businesses. Quality engineering apprenticeships are vital to the economy and skills market and Appris will continue to be at the forefront of delivery.”
Apprenticeship Levy and Transfer Information
There has been 361,400 apprenticeship starts reported to date between August 2018 and June 2019 for the 2018/19 academic year. This compares to 341,700 reported in the equivalent period in 2017/18, 472,500 in 2016/17 and 458,500 in 2015/16. Of the 361,400 apprenticeship starts reported so far in 2018/19, 62.6 per cent (226,400) were on new apprenticeship standards.
In April 2018 it became possible for levy-paying organisations to transfer up to 10 per cent of the annual value of funds entering their apprenticeship service account to other organisations in the apprenticeship service. From April 2019, this increased to 25 per cent. As at 31 July 2019, there were 920 commitments entered into the apprenticeship service, where the transfer of funds between apprenticeship service accounts has been approved. Less than 5 commitments are pending approval for the transfer of funds. Of the 920 fully agreed transferred commitments as at 31 July 2019, there were 610 that have so far been recorded as apprenticeship starts.
The ability for levy-paying organisations to transfer apprenticeship funds has only recently been introduced and initial restrictions were in place whilst the Department for Education tested the service to ensure it worked for employers. It is too early to draw meaningful conclusions from the data as employers are still responding to this new functionality, which the D for E continue to develop.
- Portakabin is a registered trademark which must only be used to refer to modular buildings manufactured by Portakabin. Portakabin is not a generic term.
- Portakabin is the market leader in the design and manufacture of modular buildings and advanced off-site construction.
- The company provides buildings for hire and sale as well as refurbished buildings and site accommodation solutions for any sized organisation in any sector.
- Portakabin employs more than 1,750 people across ten European countries.
- Visit www.portakabin.com for more information