Metro Mayor Steve Rotheram urges big firms in Liverpool city region to help fund apprenticeships at smaller businesses – at no cost to themselves. Tony McDonough reports
Big businesses in Liverpool city region are being asked to free up some of the £3bn Apprenticeship Levy to fund training at smaller firms.
Companies with an annual wage bill of £3m or more are now legally required to pay 0.5% of the total towards an Apprenticeship Levy. This is collected by the government to fund apprenticeships.
Levy payers can spend their own allocation on in-house apprentices. They can also gift up to 25% to smaller employers towards apprenticeship programmes.
However, across the country there is an underspend of £3bn. In the Liverpool city region this underspend is estimated to run into the tens of millions. Metro Mayor Steve Rotheram says this could be used to create hundreds of apprenticeships.
Although apprentices are typically viewed as young people aged 16 to 24 there is actually no upper age limit. It means employers can take on a young trainee or also use apprenticeships to upskill existing members of staff.
Smaller employers – with annual salary bills of less than £3m – pay a maximum of 5% of the cost of their apprenticeship training with the Government paying the rest.
The Combined Authority has already helped to transfer £2.4m of unallocated apprenticeship levy to smaller firms creating more than 560 new training roles.
For every £1 invested in apprenticeships it is estimated the average return on investment is £27, meaning that the levy transfers facilitated so far have created a benefit of around £65m.
“Having trained as an apprentice myself, I know the life changing impact that good quality careers advice and training can have on a young person’s future,” said Mr Rotheram.
“But for far too long, our young people have been held back from fulfilling their full potential, not by a lack of talent, but a lack of opportunity – and I’m on a mission to change that.
“Currently, there is a national underspend of billions of pounds of Apprenticeship Levy funding which is diverted from the Government’s stated mission to plug skills shortages.
“That is criminal. This is funding that could help us to change countless young lives across our region, but we need employers to work with us to ensure that this funding doesn’t just sit gathering dust in a bank account in Whitehall.”
Mr Rotheram has repeatedly called on Government for the Apprenticeship Levy to be devolved to local areas. He is now urging local employers to pledge to gift unused levy to smaller local firms.
Apprenticeships are delivered from Level 2 (GCSE equivalent) through to Level 7 (Masters’ Degree equivalent) and can be utilised across multiple sectors.
Mr Rotheram added: “By joining our Apprenticeship Levy pledge, local businesses will not only be helping to build a more robust and skilled workforce but also giving the next generation access to quality training programmes.”