Levy transfer: revolutionising apprenticeships in the West Midlands

West Midlands Combined Authority (WMCA) has started an apprenticeship revolution.

They’re the first combined authority in the country to officially support levy transfers, and it's gone down a storm. They work with large employers to transfer their unspent levy funds – money that would otherwise be lost to central government – to local SMEs in need of apprenticeship funding. It keeps investment within the West Midlands, helping to boost growth, support young people, and develop core skills in the area.

So far, large employers in the West Midlands have transferred £4.2 million of levy funds in just three months. It’s an incredible scheme, and one which other combined authorities around the country are planning to replicate.

To find out more, we spoke to Louise Ward, apprenticeship levy manager at WMCA.

Louise, what’s your role at WMCA?

'I’m the apprenticeship manager at West Midlands Combined Authority. We sit alongside the Mayor of the West Midlands, Andy Street, and work with partners, training providers, colleges and employers to support the growth of apprenticeships across the region.'

What targets do you have for increasing apprenticeship numbers?

'We have an Apprenticeship Promise for young people – that anyone aged 16 to 25 who wants to do an apprenticeship or work-based training in the West Midlands will have the opportunity to do so.

Ultimately, we want to double the number of apprenticeships in the West Midlands by 2030.

This is really important work. Since the apprenticeship levy was introduced, the UK has experienced a significant decline in apprenticeship starts – but the levy transfer can help reverse this trend. By engaging with large employers across the region, we’re hoping to support £40 million in transferred levy investment to SMEs in the next 5 years.

Since April 2019, levy-paying employers have been able transfer up to 25% of their levy funds to other organisations – but many employers didn’t know where to begin. They knew their unspent levy funds were going to start being transferred back to national government in May 2019, and that they’d just lose that money, and weren’t sure how to stop that happening.

So far, nationally, £37 million has been transferred back to the treasury – so I think that shows a real need to increase levy transfers to SMEs and keep this money in the local region, and make sure it’s being used properly.

That’s why WMCA has set up the levy transfer employer partner scheme. We work with large organisations to transfer their funds, find SMEs in need of funding, and support them through the whole process.'

How do you engage with large employers?

'We have the backing of the Mayor of the West Midlands, the former CEO of John Lewis, who has strong business acumen and tends to attract the interest of big businesses because of his background. We also work closely with the ESFA, which is great, and our local business Chambers. We connect with employers on LinkedIn and speak to them directly to re-educate hiring managers about what they can do to re-invest back into the region.'

How do you match up levy-paying employers to SMEs that need funding?

'Our agenda is led by the Local Industrial Strategy for the West Midlands. We were also the first combined authority to publish an industrial strategy, which sets out a roadmap for success in the region. As part of that, we’re looking to fill regional skills gaps in science, technology, engineering and manufacturing apprenticeship standards. We’re also looking at digital, accountancy and construction. These are the core sectors of our industrial strategy, sectors which are seeing huge growth in the West Midlands, but require more trained staff to fill jobs and keep that growth going.

We’ve identified a shortfall in the 16 to 18-year-old funding market too, so we’ve widened our scope to include all subjects at all levels for this age group. We’re also inviting expressions of interest for apprenticeships that fall outside this scope to benefit people in the West Midlands.

So far, it’s all been really successful. Since April 2019, we’ve received transferred funds of £4.2 million and supported 23 organisations, with £935,000 of planned spend for apprenticeship training for 77 learners – and this will only increase in the new academic year.'

Which employers have been involved so far?

'We’re currently working with multiple organisations such as Lloyds Bank, HSBC, BT, Suez and National Express to name a few.'

Why are these employers interested in transferring their levy?

'Many organisations see it as part of their corporate social responsibility – investing in the local region. Others want to do what they can to support skills development across the UK. West Midlands Combined Authority are the first of nine combined authorities to launch this initiative, and I’d imagine the rest will soon follow our lead.'

One of the combined authorities soon to be supporting levy transfers is Greater Manchester – home to OneFile HQ – who are launching their own scheme on Friday. Our CEO, Susanna Lawson, has been invited to advise GMCA with the process, so we’re sure they’ll be starting their own apprenticeship revolution soon too.

If you pay the levy and are interested in employing apprentice, download our ultimate guide to hiring an apprentice.