This update from Deloitte advises housing associations to consider opportunities to benefit from Apprenticeship Levy funding.
6 July 2018
Since the introduction of the Apprenticeship Levy in April 2017, employers have focused on two key issues:
- converting existing training and development programmes into qualifying apprenticeships via an existing apprenticeship standard or by developing a new standard, and/or
- developing new training programmes to attract and retain new talent, again either by using existing apprenticeship standards or by developing new ones.
Varied uptake from employers
From Deloitte’s experience, there has been a varied uptake among employers of the Apprenticeship Levy. While some are absorbing the levy as an additional employment cost — where there are easily identifiable apprenticeship roles that can be mapped to use a formal existing apprenticeship standard — others have generally implemented these ‘quick-wins’, such that levy funding can then be used.
However, the consideration and development of new apprenticeship standards for existing training, or developing new training programmes to be able to take advantage of levy funding is perhaps taking longer to undertake and implement.
This seems to be supported by evidence from the Department for Education earlier this year that the number of new apprenticeships started in the first two quarters of the last tax year declined compared with the same period the previous year.
However, given employers have two years to ‘use or lose’ their levy funding, the expectation is that we will see these numbers picking back up as more employers get to grips with the new rules and start to use more funding before the end of the current tax year.
Opportunities and challenges for housing associations
From a housing association perspective, there are a number of existing apprenticeship standards, such as housing/property management assistant and property maintenance operative, as well as those in social care and central roles, such as business and administration, that are likely to be relevant for levy funding.
However, in speaking to employers in the sector about why they are not using levy funding for more apprenticeships, they have generally cited:
difficulty in meeting the criteria of an apprentice having at least 20% of their paid hours being spent on off-the-job training
a lack of time or resources internally to consider and develop new standards or develop new training programmes that would also qualify.
This latter point is an issue we see across all sectors and industries, and is not specific to the housing sector.
What you should do
We recommend that, now we’re in the second quarter of the 2018/19 tax year, you evaluate all potential apprenticeship roles and consider how you can qualify for levy funding to allow you to benefit from levy contributions already made, before these are lost at the end of the two-year expiration period.
This would allow you to take advantage of the significant opportunities for housing associations to benefit from levy funding, as well as the added advantage of lower employer National Insurance costs in respect of apprentices.
If you would like to discuss further, please contact Will Jeffwitz (email@example.com) or your usual Deloitte contact.