This week the Scottish government published its response to a consultation on the operation of the apprentice levy in Scotland. This is the Westminster government’s key skills agenda, and many employers and their organisations have raised concerns about its impact and possible consequences. The cost focused and cash strapped oil and gas and construction and engineering sectors are a case in point. CIPD’s North of Scotland and Islands region chair Bev Pirie whose day job is leading learning and development with Technip, and West Chair George Galloway former HRD at Diamond Power and People Skills consultant, have been helping us to understand that challenge given their close insight. Both have close links with the industrial training boards which will be severely impacted by the levy which imposes a 0.5% charge on organisations with a payroll over £3m.
The funding should then be reallocated via credits to building the essential pipeline of skills and capability through apprenticeship and other training and skills initiatives. At first glance the Scottish Government proposes what any cash strapped government would do: it has tried to direct the levy into its own skills policies. So levy funding is already being pushed towards more foundation apprenticeships, graduate opportunities and inclusion initiatives. There is also provision for extra funding for rural apprentices. That will mean that some employers will see some of their levy funding being channelled to build skills more generally maybe part of Theresa May’s recently branded “sharing society”. Such an approach might impact existing pooled schemes such as that of construction and engineering. A heavy burden will fall on already curtailed public sector training budgets.
The positive news in all of this is that organisations increasingly see the apprenticeship system as critical to our complex skills needs. CIPD has shown this consistently in our research on apprenticeship via the Labour Market Outlook. In Scotland as a new report from IPPR Scotland shows we have a big challenge to balance the impact of automation with the need to be one step ahead of the robots. Apprenticeship should play a big part in this and CIPD will do all it can to support that effort.
CIPD broadly supports the destination of a more integrated skills system based on building the skills of young people. In our submission to the Scottish Government review we suggested linking apprenticeship programmes at the graduate level with Scotland’s eight innovation Centres. That way the leading edge sectors would be able to link new products to the skills required and jobs in factory construction, medical technology, sensors and green energy would flow. We will keep pushing this. We also questioned the value of using levy funding for foundation apprenticeships. Some believe that this is hard hearted given their alleged role in promoting social mobility. But for CIPD basic skills should be a fundamental part of the government funded School and FE sector. Help for SME's is also welcome and CIPD’s People Skills project has already identified the value of apprenticeship in the massive SME sector, which will be a net beneficiary of the levy.
However no amount of target announcements and pledges by government will create the employer engagement necessary. There is no sorcerer in the policy space who can conjure up opportunities only employers can do that. We need employers who passionately believe in apprenticeship and in truth the levy has distracted us. At Westminster level what is seen as a tax on training has dissipated much employer energy on accommodating the change, time and money that could have been spent employing apprentices. We hope that Scottish government’s proposals seek to build a better skills system. That way though we can’t make robots vanish we can stay one step ahead.
Sandy Begbie Chief People Officer at Standard Life will be talking about apprenticeship (among other initiatives) as a method of increasing diversity and inclusion at Scottish Student Conference 18 February. Book here for lowest ever price.
