Chairman's Blog: Changes to apprenticeship funding are an opportunity

By Robin Mackie

Chair of Gateshead College

I’m an advocate of apprenticeships; I was one and there’s still not enough parents advising their children to follow this route. It’s a great way for businesses to develop their workforce and there are many great examples of North East companies who do this.

Just last week we saw some of these – including Sage, Bond Dickinson, Hays Travel and Nifco– named among the country’s top 100 employers for developing apprenticeships and picking up awards at the recent National Apprenticeship Awards.

More companies, large, medium and small, can benefit by recruiting and investing in apprenticeships. That’s why it’s worrying that so many regional businesses still seem unaware or confused by the forthcoming apprenticeship levy and how it will affect them.

We want to see more apprenticeships not less. Apprenticeships work – for the employer and the employee. They give people of all social backgrounds the opportunity to get into work and acquire useful skills.

I’ve long believed in the value of vocational qualifications and as chairman of Gateshead College I’m keen to bang the drum and encourage more young people and their parents to consider technical education.

Change is coming and businesses need to prepare for the introduction of the apprenticeship levy this April. The time for moaning about its introduction and speed of introduction is over; businesses now need to understand the changes and grasp this opportunity.

For those not sure, the new apprenticeship levy will affect all businesses with a payroll of more than £3m, adding 0.5pc to payroll costs.

Companies and public sector employers need to accept this shift and invest time in how to use this money wisely to improve the performance of their business. And it’s up to employers to decided what they need and not simply settle for a standardised approach when training and workforce development can be specifically tailored. We do this well and can help advise in these areas.

With changes underway, it’s important for regional economies like the North East and outstanding training and education organisations like Gateshead College that the levy’s introduction does not disrupt the opportunities for our young people.

Through my role at Gateshead College, I’ve seen the close links there are with regional businesses, where there is regular and genuine engagement. These companies have been made aware of the levy and the forthcoming changes and are preparing themselves.

They are working with Gateshead College to develop customised programmes that suit their business needs.

However, we know through our partnership work with the Entrepreneur’s Forum and the North East England Chamber of Commerce that many employers are still in the dark. It’s critical that we all spread the message fast to ensure we not only maintain the level of apprenticeship starts but accelerate this number.

That’s why my colleagues at Gateshead College are talking to as many companies as they can about the forthcoming levy – not only outlining the human resource and workforce development opportunity but also the financial impact on an organisation.

For instance; the levy will be paid by employers to HMRC via PAYE. Also, once taken the funds then sit in a digital account and will expire after 24 months if not properly invested by the company. Invest it or lose it!

This levy needs to be maximised and put to best use. This change should be seen as a real opportunity for businesses to invest in new recruits and develop the workforce they already have.

Gateshead College is working closely with the Chamber to put on advice events explaining to North East businesses how the apprenticeship levy will work and how it can be best used. A specialist team at the college is guiding businesses through all of the changes, step by step. Two events are planned at the college’s Baltic Campus site on February 15, March 8 and March 15. There is more detail at www.neechamber.co.uk/events.

Robin is also managing partner of The Mackies Partnership.