Levy pooling: a step in the right direction
The levy hasn't got off to the best start.
Over a year after it was introduced, apprenticeship starts are still down and employers have only spent 8% of the funds they paid in. This means £1.29 billion is still left in the pot to invest in apprenticeship training – so why aren't employers spending it?
In a recent survey, 37% of employers said that they support the levy in principle, but feel the levy needs to be reformed in the future. Encouragingly, the government agrees and has accepted the need for change. One of the proposed reforms, put forward by the CIB, is levy pooling – giving employers the flexibility to pool and share their funds. While we know this won't solve all the problems with the levy, it is a step in the right direction.
What is pooling?
Pooling is a way for employers to group their levy funds together. It means smaller employers can share resources to increase their purchasing power and work together to develop an apprenticeship programme. Pooling could be arranged by the individual employers or by a central body.
What are the benefits?
- Increased take up of apprenticeships by smaller businesses
- More flexibility for everyone
- Increased economic strength in local areas
- Encourages partnerships between different employers and providers
- Increased quality of training
- Larger variety of apprenticeship standards being developed
- Reduce the skills gap
What happens next?
If the government agrees to the reforms, they'll need to organise a trial run to see how they'd work in practice. This means the government will need to relax the rules on levy pooling and transfers to give employers greater flexibility over their funds. After that, employers will need support to make pooling a success.
Are any other reforms in the pipeline?
Pooling is the most promising reform on the horizon at the moment. Other changes have been suggested too, including a levy transfer system, improving quality of provision and making the digital apprenticeship service easier to use.
To find out how you can get the best ROI from your levy, download our free guide.