The West Midlands Combined Authority (WMCA) is set to kick-start a revolution in apprenticeships in the region, after two of the UK’s biggest banks agreed to become the first big businesses to contribute their Apprenticeship Levy funding to a new regional pot.
Small to medium-sized businesses (SMEs) in the West Midlands can now apply to receive funding for apprenticeship training through the WMCA.
Lloyds Banking Group and HSBC are working with the WMCA to transfer their unspent levy to help SMEs across the region fund apprenticeship training.
Mayor of the West Midlands Andy Street with Kathyrn Marshall from Lloyds Banking Group and Iain Heath from HSBC
Currently, firms with a wage bill over £3m pay the levy automatically to HMRC – and small to medium-sized businesses (SMEs) can apply for funding from this pot to pay up to 90% of the costs to train their apprentices.
However, even with 90% of the training costs covered by Government funding, SMEs may still face training fees of around £2,700 per apprentice, which can make it prohibitively expensive.
In July 2018, the West Midlands agreed a unique Skills Deal with government, enabling the region to work with businesses and transfer levy funds locally. WMCA has agreed to use the cash to fund 100% of apprenticeship training costs for SMEs.
The contributions from Lloyds and HSBC will now be added to the fund and allocated to SMEs who wish to train apprentices.
Mayor of the West Midlands, Andy Street, said: "The West Midlands is already the best place outside London for digital, construction, automotive and manufacturing skills. We want to help more SMEs to invest in training to boost growth and productivity.
"With access to levy funds, we can provide full funding for SMEs to train apprentices. I’m absolutely delighted that Lloyds and HSBC have become first levy-paying firms to sign up to our transfer fund, and welcome their commitment to fund new apprenticeship starts at SMEs across the West Midlands."
Cllr George Duggins, WMCA portfolio holder for productivity and skills, and leader of Coventry City Council, said: "The Apprenticeship Levy Transfer Fund gives the West Midlands a huge opportunity to help SMEs to grow and our residents to gain new skills and qualifications.
"We can use the fund to help SMEs cover the cost of training apprentices, meaning many firms which may not have been able to afford to take on apprentices now can.
"At the same time, that will help create new job opportunities in the region, offering residents a more vocational route to in-work training and qualifications, plus the chance to earn while they learn."
Michelle Blayney, chief culture and talent officer for Lloyds Banking Group, said: "We are delighted to be working with the WMCA on this important initiative to help more businesses engage with apprenticeships and address skills gaps in key sectors of the economy.
"At Lloyds Banking Group we know first-hand the benefits of apprenticeships. They are a core element of our strategy of Helping Britain Prosper and bring tangible business benefits, including: increased productivity and performance; enhanced engagement and loyalty; and creating a more diverse workforce. Since 2012, we’ve supported more than 7,000 colleagues on 34 different Apprenticeship Programmes at Levels 2 to 7.
"Through our partnership with the WMCA we will transfer some of our unspent levy funds to help smaller businesses benefit directly from the same experience.
"Access to fully-subsidised apprenticeship training will mean that SMEs can recruit and train more apprentices to help their business prosper and grow. Our investment will open up new apprenticeship opportunities for people across the West Midlands, enabling them to develop the knowledge, skills and behaviours needed to succeed in their careers."
Iain Heath, Head of Emerging Talent UK at HSBC, said: "As a business based in the West Midlands, we’re excited to be involved in this initiative. It brings together our desire to develop future skills and talent with an awareness that SMEs can provide exceptional opportunities for apprentices, often within their local area. As the first major high street bank to introduce an apprenticeship programme we have seen first-hand the positive impact on the participants and our business. We really want to widen access to the same sort of opportunities.
"We are working hard to utilise our Apprenticeship Levy internally and have already seen a very diverse set of colleagues benefit. The chance to use some of the unspent portion of our funds in this way goes hand-in-hand with this activity. The WMCA have shown creativity and vision to develop this ground-breaking opportunity and we hope that it inspires similar activity in other regions. Apprenticeships can change lives and now more talented West Midlands people will get the chances they deserve."
Businesses wishing to register their interest in the West Midlands Apprentice Levy Fund can sign up for more information at: www.wmca.org.uk/apprenticeship-levy
People considering starting an apprenticeship can find out more at: www.apprenticeships.gov.uk