Against this backdrop the Apprenticeship Levy has been introduced. This paper does not look at the reasons for the Levy, the operation of the funding or the flaws in either negotiating / addressing a return off the Northern Ireland contribution to the Apprenticeship Levy. This paper has been written to provide the Northern Ireland Executive with the necessary evidence in support of utilising the funds being returned from Westminster for the growth and maximum impact on the economy.
This does not sit in isolation, the consultation on the new Programme for Government (PfG) has several indicators / outcomes that the Apprenticeship Levy funds could have a positive impact on and therefore create a net benefit across the entire public / private / voluntary & community sectors.
A revised view of how the Apprenticeship Levy is used can help achieve the following PfG outcomes:
1. O1 – we prosper through a strong, competitive (regional balanced) economy
2. O3 – we have a more equal society
3. O6 – we have more people working in better jobs
4. O11 – we have high quality public services
5. O12 – we have created a place where people want to live and work, to visit and invest
6. O14 – we give our children and young people the best start in life
It can additionally be linked by empirical data and information to enabling the following indicators within the PfG: I5, 11, 12, 13, 19, 28, 17, 32, 33, 20, 14, 16,18, 21, 34 and 41
This is a reverse approach to the “Levy is of no benefit to our budget” response from the NI Executive and this paper will endeavour to highlight:
· Context of environment that the Apprenticeship Levy is entering
· Impact of skills (and investment in skills) to NI economy
· Benefit from developing a business led growth skills strategy
· Detrimental impact of weak skills supply and poor utilisation of skills
The full report presented to both the Finance and Economy departments in Northern Ireland advocates that the return should therefore be spent on activities that will:
a. Embed the benefits to the public purse of the Voluntary Exit Scheme by increasing the core transferable and job / sector specific skills of all public sector workers (focusing on specific departments and on the NHS staff).
b. Comprehensive review and implementation of the Leadership and Management Strategy to improve the ability of the public / private / voluntary and community sectors to grow while remaining competitive and improving productivity.
c. Create an environment where business recognises it has a responsibility to invest in skills and the NI Executive is willing to ensure there is an “eco-system” for this to happen within (post-primary, FE and HE structures, 14-19 qualifications, the Entitlement Framework etc…).
d. Develop Productivity. While skills alone cannot address productivity shortfall in the NI economy it is an integral part of doing this. The UK lags Germany and US by some 30 percentage points. We also lag France by over 20 percentage points and Italy by 8 points. It therefore takes a German worker 4 days to produce what we make in 5 days, this in turn means than many British workers work long hours for lower pay than their counterparts” (Chancellor of the Exchequer, Philip Hammond, 23-11-16, Autumn Statement). In Northern Ireland we are 25% less productive than UK average. Training and skills should therefore be targeted at cross sectoral activity such as NVQ’s in Business Improvement Techniques / Problem Solving etc…
e. Reduce the cost of double funding skills training through providing support to Department of Education to integrate essential skills in Numeracy and Literacy into the GCSE framework and ensure the 35-40% of young people not achieving grade A* to C is properly and adequately addressed.
In an economy and region that suffers from low pay and low growth, the approach to the Levy, while not likely to address business concerns entirely, which is outlined will ensure the NI Executive sets out in the right direction to develop our economy, improve our public services and support growth in better jobs across the community.
Based on this there are specific opportunities to develop and utilise the funds across the public private and 3rd sectors that will impact competiveness / productivity, innovation and skills lending support to making any change to Corporation Tax positive.
a. Developing new and focused leadership and management strategy, focusing financial support on levy paying business
b. Additional support to bring those outside training and skills pathway to get into level 0 / level 1 and therefore enter the progression pathway
c. Develop supply chain development in skills and capability to ensure levy paying businesses can support skills frameworks
d. Further broaden improvement skills across the public sector which could support embedding the Voluntary Exit Scheme
e. Develop public sector apprenticeship framework to utilise levy funding and therefore help improve quality of public services
f. Provide a tiered company payment structure to incentivise SME business engagement in apprenticeship and youth training (potentially from £750 to £1000 as example)
g. Ensure central service funded and fully utilised across public and private sector to support careers advice, skills assessment, apprenticeship and youth training
h. Active engagement and funding support for a proposed Investors in Apprenticeships award being reviewed by the Department for Education at Westminster
Individual businesses in England have direct access to the funds they actually contribute to the Levy. Currently the organisations in NI are not afforded the same opportunity. It would be very beneficial that companies and organisations paying into the Levy can each be directed ‘credited’ with they contributed to be drawn against the future training needs. The major benefits is clearly financials however there is also the added incentive of ensuring that training and skills are seen to be of paramount importance to all in NI.
It is also essential that the Department for Economy urgently bring forward communication highlighting the difference pre and post Apprenticeship Levy in England and Northern Ireland so employers can simply and quickly understand the levy. All this should be done in parallel to a renewed emphasis and focus on delivering the Careers, Apprenticeship and Youth Training strategies.
If we are to develop a competitive economy, a more equal society, more people working in better jobs and higher quality public services we have an opportunity to do this now. While the basic assumption is we are £5m negatively impacted by the Apprenticeship Levy we actually have an opportunity.
Developing social partnership, enhancing NI Executive engagement with private sector, 3rd sector, the trade unions and the “delivery” partners of government (the NHS, local government etc…) we can use these funds as a positive force that can increase the overall return. This is a positive opportunity and one to be embraced, to achieve the outcomes from the PfG we ask you think on these words:
“It isn’t sufficient just to want,, you have got to ask yourself what you are going to do to get the things you want” (US President Franklin D Roosevelt)