Training boss warns firms to spend Apprenticeship Levy funds

Chris Luty, chief executive of Oldbury-based BCTG, has urged companies large and small across the region faced with the loss of Apprenticeship Levy funding to “use it or lose it”.

The Government has already increased incentives for taking on apprentices aged 16 to 24-years-old to £3,000 for firms employing less than 50 people.

Meanwhile, Levy-paying companies can transfer up to 25 per cent of their funding pot to other companies, enabling large businesses to support firms in their supply chain.

Mr Luty, whose BCTG group supports the training of almost 10,000 young people and adults each year, said: “Last year the Treasury took back £330 million of unspent Apprenticeship Levy money.

“The funding is clawed back by the government if it is unspent after 24 months, and figures from earlier this year, just a few months into COVID-19, showed apprentice recruitment was already falling dramatically, which means even more money will be lost to the Treasury.”

Data from the Department for Education showed employer vacancies for apprentices had plummeted by more than 80% in the first two months of the first lockdown, in April and May.

“The West Midlands Combined Authority has set up an Apprenticeship Levy transfer fund, so firms can pledge unspent funding, and that benefited more than 1,000 apprentices,” Mr Luty explained.

“But we need to act on a much bigger scale. Unemployment is rising, especially with jobs being lost on the High Street with the imminent closure of chains like Debenhams.

“That means companies have access to a huge wealth of available talent, they just need to provide the training. And the best way to do that has been proven to be apprenticeships.

“There is nothing to stop second or third tier supplier companies, perhaps too small to pay the Levy themselves, from asking firms at the top of their supply chain to contribute towards their apprentice training costs.

“Both firms benefit and it has to be better than simply returning unspent Levy cash to the Treasury as some kind of employment tax.

“In a strange way, there has never been a better opportunity to find and train apprentices – the Government is offering cash incentives, there is plenty of money going unspent in the system and, unfortunately, there are a lot of good workers without a job.”

Mr Luty added: “Firms in every sector, from services and leisure to manufacturing, need to grasp this opportunity with both hands.”