The Apprenticeship Levy has been widely criticised over its lack of flexibility by a number of industries, including recruitment, since its introduction in 2017. At the REC, we have launched our Training for Temps campaign to push the government to broaden the Apprenticeship Levy so that recruitment agencies can access their levy funds in order to train the temporary workers on their payrolls.
To support this campaign, we conducted a survey of REC members who pay the Apprenticeship Levy to find out exactly what they think of the policy, how it has been working – or not working – for them, and how our proposed changes would benefit both their businesses and their workers.
Out of 3,000 REC members based in England, we estimate that 670 have a pay bill of over £3 million a year, and therefore pay the Apprenticeship Levy – more than 1 in 5. In contrast, only around 1.3 per cent of all employers pay the levy, according to the Department for Education. This means that 1 in 25 of all levy-paying employers in England are REC members. But despite REC members making up a large proportion of levy-payers, almost half (47 per cent) of our survey respondents had been unable to spend any of the funds in their levy accounts. We estimate that altogether, the levy-paying REC members have around £104 million left in their pots, which they are unable to spend.
Respondents reported two main reasons why they had not been able to spend their levy funds – the lack of flexibility on training opportunities and the fact that they employ a large number of workers on agency contracts. Current restrictions mean that levy funds can only be spent on year-long apprenticeships, which require 20% off-the-job training. But our data shows that only 2 per cent of temporary assignments and 9 per cent of contract assignments last for 12 months or longer. This means that out of the 1.02 million temporary and contract workers on assignment every day in the UK, 960,000 of them are automatically cut off from training opportunities through the Apprenticeship Levy.
The message was clear from the data – the current Apprenticeship Levy system does not work for either recruitment agencies or temp workers. With no changes to the system, 75 per cent of our survey respondents said they would use less than a quarter of their levy funds in 2019-20. By broadening the levy and allowing agencies to use the money to fund shorter, Ofqual-regulated training courses for their temporary workforce, the government can boost training opportunities for people on flexible contracts, help more people progress in their careers, and help overcome the UK’s current skills shortages and productivity challenges.
Please sign our petition and share it widely with your colleagues, clients and temporary workers to help us broaden the levy for the better. You can find more information on how you can support the Training for Temps campaign at our Apprenticeship Levy hub.
You can also explore some of the survey results for yourself with this interactive visualisation.