Will the apprentice levy work for you?

The announcement of an apprenticeship levy in the July Budget caught many people unawares. It was also light on detail - leading to much speculation and the launch of a Department for Business, Innovation & Skills consultation. What we do know, at this stage, is that the levy will be introduced in April 2017, apply to large businesses (probably 250+ employees), be taken through the PAYE return to HMRC and be introduced across all industries irrespective of whether there is any existing levy in place.

So what could the levy mean for the food and drink manufacturing sector? Historically the industry has underinvested in apprenticeships, with annual numbers in decline in England. But, as an industry, we need to be sure these new apprenticeships fit our requirements.

As well as the levy, the government has introduced ‘Trailblazer’ apprenticeships in England, designed to enable employers to set occupational standards for their industries rather than focusing on more narrow ‘job-specific’ apprenticeships .

The NSAFD has played a pivotal role in the coordination of Trailblazer Apprenticeship reform, providing new routes for apprenticeships in quality assurance and product development, production operators, maintenance engineers, fishmongers and supply chain via the active participation of more than 100 food and drink companies such as 2 Sisters, Nestlé UK & Ireland and Warburtons.

Government tends to think of ‘quality’ as being about higher-level apprenticeships and, while as an industry we need people at all levels, it is imperative there should be no restrictions. A well-designed Level 2 Apprenticeship is not inherently lacking quality if it delivers what industry and learners need to follow their chosen occupations.

And what of the financial implications? If, as proposed, each company’s levy contribution is put into a ‘non-refundable’ account to fund apprenticeship training, there will potentially still be significant additional costs for the business in recruitment and salary costs.

If, as suggested, the levy is applied only to larger businesses of 250+ employees, this will impact just 3% of food and drink businesses. We don’t believe there is any rationale to this - the levy should provide a fair and level playing field and we support a single approach for companies of all sizes.

Currently many providers have ‘guaranteed’ contracts from government to deliver numbers of apprenticeships every year. This will no longer be the case and each provider will have to market themselves to their real customer - the employer - rather than to government. This will inevitably make the system more responsive in the long run but does risk short-term disruption.

There will continue to be change in the vocational educational system, with significant work being done by government, and throughout this we as an industry need to show strong employer collaboration in order to ensure the ongoing improvement of apprenticeships.

Justine Fosh is chief executive of the National Skills Academy for Food & Drink