The Apprenticeship Levy Transfer Fund set up to supercharge apprenticeships in the West Midlands has hit a £5m milestone thanks to contributions from large employers.
And the fund has now created more than 150 new apprenticeships at small to medium-sized businesses across the region.
The West Midlands Combined Authority (WMCA), which set up the fund, says the £5m milestone is just the start – it is hoping to secure up to £40m to rejuvenate apprenticeships across the region.
Apprentice Connor Lines is pictured with Jay Rixon, operations manager at Lansalot
Local people, like 18-year-old Connor Lines, are already benefiting from the fund. Connor, from Bromsgrove, joined Lansalot Limited in Redditch as an Infrastructure Technician apprentice in August (see case study below).
Andy Street, the Mayor of the West Midlands, said: “We’ve made excellent progress with the apprenticeship levy since our £69m Skills Deal agreement with Government last summer.
“We knew we could make a real difference to people’s lives in the region by reinvesting money in the West Midlands which would otherwise have been lost to central Government in London, and using it to support small to medium businesses to meet the costs of apprenticeship training.
“Thanks to large organisations donating their unspent levy, we’re creating new job opportunities at companies who may otherwise have been unable to afford to hire apprentices.
“I’ve met some of the apprentices who have been hired as a result of our fund, and it’s clear we are making a difference to their lives. The next step is to continue to get more firms to pledge their unspent levy so we can hit our £40m target, allowing us to create more apprenticeship opportunities, benefitting both businesses and residents across the region.”
The apprenticeship levy is charged by HM Revenue and Customs on all businesses with a payroll over £3 million. The levy money is held centrally by Government, and businesses across the country can apply for a slice of that funding to pay up to 95% of the costs of training their apprentices. After a two-year period, unspent levy contributions are ‘sunset’ and retained by the Government.
The £69m Skills Deal agreed with the Government in summer 2018 – the first of its kind in the country – set up the Apprenticeship Levy Transfer Fund by allowing the WMCA to partner large organisations with local small to medium-sized enterprises (SMEs). This means the large employers donate a portion of their unspent apprenticeship levy funds to the smaller companies, covering 100% of their apprenticeship training and assessment costs.
This approach keeps levy money within the West Midlands region, boosting skills, job opportunities and productivity by supporting more young people and adults of all ages into work.
The £5m contributed so far is the result of large organisations – including Lloyds Banking Group, BBC, National Express and the University of Birmingham – joining the WMCA partnership.
Jo Harris, Lloyds Banking Group Ambassador for the Midlands, said: “Working with the WMCA to increase the number of apprenticeships and address skills gaps in the region supports our ongoing commitment to help Britain prosper.
“Access to fully subsidised apprenticeship training will mean that SMEs can recruit and train more apprentices to help their business 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.
“I would encourage other large businesses to help to boost the local economy by donating their unspent levy to smaller employers.”
Cllr George Duggins, WMCA portfolio holder for productivity and skills and leader of Coventry City Council, said: “This is a great milestone and shows we’ve made a strong start in using levy money locally to create new apprenticeship opportunities.
“Now we want to accelerate our progress to create hundreds more apprentices and build up the funding available to SMEs to take on new apprentices or upskill their existing staff with apprenticeship qualifications.”
The WMCA is now calling on employers who may not have considered hiring apprentices to tap into the Apprenticeship Levy Transfer Fund. Large organisations are also being encouraged to get in touch to discuss transferring their unspent levy. For more information, visit www.wmca.org.uk/apprenticeship-levy or contact firstname.lastname@example.org
Case study – Lansalot Limited, Redditch
Local people, like 18-year-old Connor Lines, are already benefiting from the fund.
Connor, from Bromsgrove, joined Lansalot Limited in Redditch as an Infrastructure Technician apprentice in August.
He said: “I did sixth form and did BTECs in engineering, applied science, IT and an AS in physics, and I knew I wanted to do an apprenticeship after - I wanted to do something hands-on, so university wasn’t something I was particularly interested in, sitting and listening to someone rather than getting involved. That’s also one of the reasons I initially wanted to be an engineer.
“I had no idea I would get into IT. When I heard about the apprenticeship with Lansalot, I went in for a chat and everything seemed really good, and I started in August. It’s been really good so far, it’s worked out really well. I love it.
“The apprenticeship lasts for 18 months, and I’ll learn lots about the job in that time. Once it’s over, we’ll have a chat and I’m hoping it leads onto a full-time job. I’d definitely recommend apprenticeships to other people.”
Jay Rixon, operations manager at Lansalot, said: “We’re a small family business and there was no way we could afford to pay for apprentice training as well as their wages – so being able to get the training paid for, for free, is brilliant. We used this opportunity to pay the apprentices more than the basic wage, giving them a really great start.
“There is still some cynicism about apprentices – I think some businesses don’t realise that the training is covered for free in most cases, they think the money givers will want something in return. But they don’t – it’s great knowing that not only is our business benefiting but so is another amazing local lad.
“Connor is our third apprentice – the previous two are now full-time staff – so we knew the benefits of having an apprentice but just would not have been able to afford any of them without the levy funding.
“I think apprentices are a really good way for young people to get their heads around the real world of work – you see people come out of university with no idea how to behave in the workplace, what the expectations are. With apprentices, you can train them in the job but also help them in life: we’ve helped our apprentices to move into their own apartments. I am so very proud of them all.
“I’d encourage all small businesses to look into apprentices and the funding from the WMCA – even if it doesn’t seem like it’s for them, it’s worth putting in the time to find out if these new apprentice programmes could help their business.”