Apprenticeship Levy – A Public Sector Update

Public Sector organisations are no different to their corporate, private counterparts in that they have to pay the Apprenticeship Levy at 0.5% of their payroll.

As well as having the time pressure of levy funds expiring after 24 months, Public Sector organisations must have regard for the ‘Public Sector Apprenticeship Target’, in which public organisations with more than 250 staff, must have 2.3% of their workforce as apprenticeship starts each year. Some of the common misinterpretations around the target are:

• The target will be calculated using headcount not full-time equivalent (FTE) calculations
• The 2.3% must be starts per year, not the number working towards apprenticeships
• The reporting year is Apr – March and must be reported by the end of September
• Performance will be measured on an average from 1 April 2017 to 31 March 2021

Once the data from Year 1 (Apr 17 – Mar 18) has been collated, we will understand how different organisations are performing, but in the meantime, we can use early indicators by comparing data from the Office of National Statistics (ONS) Public Sector Employment data with apprenticeship performance data from the Education and Skills Funding Agency (ESFA). This would suggest national performance is at around 0.8%, with still some way to go – although, anecdotally, it seems that performance has increased in the following quarter.

Another area of consideration for Public Sector Organisations are the Public Procurement Regulations. The Regulations dictate how a Public Sector organisation can procure services, such as Apprenticeships and Associated Training. In some cases, confusion around these regulations has caused paralysis in the process of spending the levy. 3aaa have worked with many partners and now have a compliant route for every Public Sector organisation in the country – it is a complex area that we are happy to signpost and advise on.

Organisations within the Public Sector now seem to be getting to grips with the levy and procurement regulations. Over the next 12 months, we expect to see a more strategic approach to procurement that will ensure the Public Sector sees a better return on their investment. This strategic approach will result in more contracting authorities moving to lead provider and Managed Service Provider (MSP) relationships & further collaboration across Public Sector organisations. As new skills strategies are published by the Combined Authorities and devolved agendas mature, this collaborative approach will develop further, and we will start to see best practice appearing across the country.

I will be speaking at 3aaa’s Levy Conference on the 12th September on the challenges the Public Sector faces and discussing solutions to gain traction. Find out more details here.

We will be following this up with a Public Sector Roadshow across our network of 36 academies where we will look at how a strategic approach to commissioning will work in practice. Find out more details here.

You can also access the useful ‘Guidance on Public Sector Apprenticeship Targets’ here.