Debugging the apprenticeship levy

Since the apprenticeship levy was launched almost two years ago, many Surrey employers have struggled to spend their levy ‘pot’ on developing their existing staff and training new talent.

It’s an issue that has been taken up by the Surrey Employment and Skills Board (ESB), which was established by Surrey County Council in 2013 as a collective voice for employers on skills issues that impact local economic growth and productivity.

Following detailed discussions with a cross-sector sample of Surrey levy payers from both the public and private sector, the board has produced a number of papers setting out the issues – and some suggested solutions.

The levy is adding value, and some firms are using it to kick-start their own training processes and change attitudes. However, there are significant glitches in the levy design; a lack of consistent, comprehensive and practical information and advice; and delays in developing some core aspects of the new system, particularly standards.

“It’s important not to get distracted by ‘what’s wrong’ and miss the value of the levy to employers who use it as a catalyst for change

This complexity needs to be managed from the start. Organisations are committed to spending the levy, but the infrastructure, responsibilities and resources required to set up and effectively manage the levy were not well understood, which has delayed apprenticeship starts.

The ESB has suggested that introducing a smaller contribution during the ‘set-up’ period would give organisations entering the levy the time to get ready before the first full levy payment is taken. Current levy payers should be allowed to use some of their fund to offset the costs (including salaries) of establishing a quality apprenticeship programme that meets future skills needs.

Another issue is support for employers. Apprenticeship training providers have had to hand-hold employers through the levy set-up and management, and are the ‘go to’ point of contact for support – but this is not sustainable.

We think better digital solutions and/or apps are required to help employers navigate each stage of the levy process. Any levy underspend should return to the local area in which it was raised, with a proportion reinvested into practical employer support at the local level.

We also need to extend the levy period, before funds start to expire, to support employers transitioning between existing frameworks and new standards.

It’s important not to get distracted by ‘what’s wrong’, and miss the value of the levy to employers, who are embracing it and using it as a catalyst for change – for example, to kick-start an apprenticeship programme, target traditionally ‘hard to recruit’ areas and trailblaze new standards.

If the levy is to reach anywhere near the Government’s target of three million starters by 2020, it requires a significant upgrade to fix the ‘bugs’ and accelerate employer usage and engagement.

For more information about Surrey Employment and Skills Board, please visit

Further changes are needed to the apprenticeship levy to make it work for local economies