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Don't spoil the ship for an ha’peth of tar!

Posted on 13 September, 2017

Jill Whittaker, Managing Director of HIT Training, discusses  the 10% employer contribution for non-levy payers - the "elephant in the room" - with FE Week 

Falling learner numbers, Ofsted inspections in the news for all the wrong reasons, pauses and restarts to the ESFA tendering process… anyone would think that the apprenticeship market is in trouble.

The reality couldn’t be further from the truth. Employers love the new apprenticeship standards as they can see the very real business benefits that they bring, as well as delivering great skills and social mobility to the apprentices themselves. For the first time since I can remember (and I’ve been around a while) both school leavers and their parents are recognising that apprenticeships are a great way to build a career – and not only if you’re the ‘non-academic’ type.

Large employers are seeing the impact that the apprenticeship levy is having on their bottom line and far from treating it as yet another tax to be suffered, they are asking what business benefits apprenticeship programmes can bring to their organisations. Apprenticeships are being talked about in positive terms in Board Rooms around the country.

The elephant in the room is the 10% employer contribution for non-levy payers. SMEs have traditionally formed the bedrock of apprentice employers. The fact that, until 1st May 2017, SMEs didn’t have to make a financial contribution was welcomed by small businesses. It should be understood that these employers never saw apprenticeships as free training – they always knew that they were funded from taxes by Government.

Small businesses often struggle to make a margin, and the ability to have their apprentices trained by professionals without it depleting their bank account allowed many thousands of small businesses to employ and train extra staff. The argument that in order to value apprenticeships businesses cash must change hands holds no water. SMEs are, collectively, the backbone of our economy and the places where many of our skilled professionals start their careers.

As training providers we have worked hard to continue to engage with SMEs since the 10% contribution has been introduced (85% of HIT’s apprentices work in SMEs) but for many businesses with whom we have had professional relationships for many years the cash contribution, on top of hikes in business rates and compulsory pension contributions, is too much to pay. If nothing is done to alleviate this cost for small businesses I fear that they will be forced to offer less well-rounded training giving their staff a set of non-transferable skills. In these pre-Brexit days, we need a strong economy supported by great skills, not one underpinned by an underclass of minimally skilled individuals.

So, a plea to the Government – we have a thriving apprenticeship market with great programmes and extensive opportunities to build skills to support a post-Brexit UK. For goodness sakes let’s not spoil the ship for an ha’peth of tar. Remove the SME contribution now. You know it makes sense.

**Article from FE Week**

Testimonials

McMullen’s chose HIT as its sole external provider for Apprenticeships and vocational qualifications in early 2015 and since then we have found them a pleasure to work with.  Their expertise in this sector is superior and they have proven to be a professional and supportive partner who have a passion for learning and development, which matches our own organisation.

Amanda Walden – Training & Recruitment Manager, McMullen's

Encouraging our staff to improve their skills set and supporting them through apprenticeships and training programmes underlines our commitment to help them further develop their own careers. Offering the Level 4 Higher Apprenticeship also gives the Brend Group a point of difference which I’m convinced will help attract new members of staff in the future.

Andrew Mosedale - Group HR Manager, Brend Hotels

Our partnership with HIT has certainly made recruitment much easier in a very difficult labour market and gives us a point of difference in an increasingly competitive environment.  Kew Green has also benefited enormously from well trained, skilled and competent staff who contribute significantly to the ever improving and high levels of customer experience that our guests expect and deserve.

Andrew Tregenza - HR Business Partner, Kew Green Hotels

Apprenticeships allow us to give people a great opportunity to develop a career with us and learn a skill or trade that will accompany them throughout their career and life. We see progression to the Level 4 qualification as key to our strategy of providing development at all stages of an employee’s career with Harrison.

Alex Taylor - Training Manager, Harrison Catering Services

There is a shortage of skilled chefs within in our industry at present and any organisation that truly believes in the value of training and development of bright future stars will enable themselves to be in a strong position for the years ahead. Investing in smart training and development is at the heart of what we do within WSH, so it has been refreshing to work alongside HIT within our Baxterstorey Chef Academy. 

Rik Razza - Head of Chef Development, BaxterStorey

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