Nick Ellins, Chief Executive, Energy & Utility Skills

Utility support for new Apprenticeship Regulator call for public funding and productivity

Jennifer Coupland 100x100

Jennifer Coupland, the new chief executive of the Institute for Apprenticeships and Technical Education, has called for an additional £750 million for SME apprentices. Coupland made the remarks during an interview with the Financial Times shortly after her appointment in November.

Meanwhile, the Treasury has indicated that the upcoming March budget will have a strong focus on skills, notably on apprenticeships and the upskilling of existing workers.

The Chief Executive of Energy & Utility Skills has given public support for the views of the new Chief Executive of the Institute for Apprenticeships and Technical Education, Jennifer Coupland:

The English apprenticeship regulator has chosen the optimum moment to propose pragmatic and productive change.

The existing Westminster apprenticeship strategy ends in 2020, the UK Industrial Strategy is set for makeover, the Conservative Party manifesto made clear they were open to looking at Apprenticeship Levy reform and both the National Audit Office and Public Accounts Committee are explicit regarding the need for change.

In addition, UK Government already openly broadcasts that it receives circa £26 to £28 for every pound invested in apprenticeships. It’s an obvious and easy win for the new Government’s budget and Ms Coupland is absolutely right to call for the opportunity to be taken now.

The recent independent UK utility sector research on its adaption to the Levy, authored by Professor David Way, showed clearly that employers are finding the ultimate outcome of the policy reforms – the apprentices themselves – as an improvement on the previous approach.

The Apprenticeship Levy mechanism itself however received less favour, with an opaqueness to where employers unspent money is going and many contributing employers simply unable to recover their payments because the policy reforms have not yet developed enough for them to engage.

The new Energy & Utility Skills report entitled ‘Test and Adjust’ advised:

The predicted funding shortfall for Apprenticeships must be transparent. Any funding gap should be filled by a combination of increased public funding and lowering the payroll threshold to below £3m for employers who contribute to the Apprenticeship Levy. Public funding offers a proven healthy return for the UK economy.

The energy and utilities sector employs over half a million people, generates 5% of GDP and contributes £51m annually to the Apprenticeship Levy pot. They have set the standard in delivering successfully against these policy reforms and from the start sought to positively help the Westminster government to ‘test and adjust’ its approach.

The new report from Professor Way, sets out clearly for the incoming government, where to adjust the reforms to bring immediate benefits and policy success

Too much time is being spent focusing on the Apprenticeship Levy as an end in itself, what matters is the quality of the talent that emerges into the economy and society, and how effectively the system works for the employers who foot the bill.

The Apprenticeship reforms have brought undeniable benefits to the employers in our sector, and they wish to accelerate the gains being made by identifying and embedding reforms that will work for the incoming government and for business.

Their track record of turning theory into practice makes them a tried and tested partner for government. It is time to step back, draw breath, talk candidly, target the resources and efforts to maximum effect and use this insightful research to help Apprenticeship policy progress to support the needs of the whole UK economy.

Nick Ellins, Chief Executive, Energy & Utility Skills, the sector skills specialist body for the UK utility sector

ECA has warned that proposed increases in funding for non-levy paying employers to invest in apprenticeships may not be enough to address the sector’s current and future needs.

Andrew Eldred, ECA Director of Employment and Skills, comments:

“National Apprenticeship Week is a time for celebrating apprentices and the businesses who invest in employing and training them. At the same time, we cannot afford to ignore the worsening shortfall in funding available to small firms outside the scope of the apprenticeship levy. The cat is now out of the bag, with the Institute for Apprenticeships’ own Chief Executive calling for an extra £750 million for non-levy employers. In fact, according to the Association of Employment and Learning Providers, we need double this amount.

“The electrotechnical sector currently creates over 6,000 apprenticeships annually, the vast majority recruited and trained by small employers. If the Government is to have any chance of meeting its policy objectives on public infrastructure, housing, green energy, digitalisation and building safety, then this number needs to be even bigger. Prolonged uncertainty about non-levy funding is putting all this at risk.”

The number of apprentices currently recruited each year is insufficient to meet projected demands, according to the Electrotechnical Skills Partnership (TESP). Research suggests that even if an extra 5,000 new apprentices qualified by 2023 (representing a 33% increase), this would still leave a shortfall of 7,500-10,000 electricians.

A labour market report on the electrotechnical industry carried out by TESP in 2019 estimated that between 12,500 and 15,000 additional skilled electricians will be needed over the next five years to accommodate forecasted growth.

National Apprenticeship Week is taking place from 3 to 9 February 2020.

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