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Apprenticeship levy rules ‘biased against younger workers’

21 Sep 2017 By Hayley Kirton

Employers are better off favouring older staff under current system, warns AELP

The government’s apprenticeship levy rules as they currently stand are biased against younger workers, a key industry voice has warned.

Since the levy came into force in April, businesses with a payroll of more than £3m per year have been required to pay 0.5 per cent of their total wage bill. In return, the government adds 10p for every £1 paid by businesses to train apprentices.

But according to the Association of Employment and Learning Providers (AELP), training providers are seeing incidences of employers reducing their recruitment of apprentices aged 19 and under, as the current rules have inadvertently created an incentive for them to focus on adult learners and those at management level.

“The levy reforms have essentially equalised the funding of apprenticeships across all ages,” said Mark Dawe, chief executive of the AELP. “Without sufficient financial incentives to take on young people as there were before, it is understandable that employers are turning to more experienced candidates, who may need less supervision, and are offering more apprenticeship opportunities to existing members of staff.”

In a policy submission sent to politicians, including Department for Education (DfE) ministers, earlier this week, the AELP called for all apprenticeships for 16 to 18-year-olds to be fully funded by the government, regardless of the employer.

Meanwhile, figures released by the DfE earlier this month revealed that roughly only one in six apprentices taken on since May have been under 19.

Penny Tamkin, director of employer research and consultancy at the Institute for Employment Studies, told People Management she could “completely understand” the AELP’s argument that the current system was skewed against younger workers. “Employers are acting quite rationally by favouring slightly older apprentices – they can use them more flexibly, they don’t have to worry about health and safety to quite the same extent and they get more productivity from them straight away,” she said.

Tamkin added that the role of making sure the system encouraged businesses to take on younger apprentices lay with the government. “You can’t expect employers to somehow resolve this out of some kind of sense of greater good,” she said. “It’s just never going to happen. Employers don’t behave like that. They’ve got to think about their business.”

The AELP has also seen evidence that the 20 per cent requirement for off-the-job training – which Education and Skills Funding Agency representatives have previously warned they will be taking a ‘zero tolerance’ approach to – is putting some employers off recruiting apprentices, as they simply cannot afford to have them out of the office for the equivalent of one day a week.

Meanwhile, a report published recently by Evolve Learning Group found that only two in five (37 per cent) of employers with more than 150 staff felt they fully understood the levy and how it could benefit their business, despite it being introduced almost six months ago. A further third (35 per cent) were aware of the levy but unsure of how it might benefit them, while the remaining 28 per cent had not heard of the levy.

More than three-quarters (78 per cent) of those surveyed either agreed or strongly agreed that more needed to be done to increase understanding of how the levy could benefit employers.

The DfE could not be reached for comment.

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