Semta's Chief Executive Ann Watson shares her views on the latest news, policy, issues and events of interest to the engineering and advanced manufacturing sector. 


Wednesday, 26 October 2016 00:00

Latest Apprenticeship Levy Funding News

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Guest blog by Christian Warden, Head of Technical Services, Semta

The government has today published a new tranche of apprenticeship levy information and guidance, taking into account the responses to a consultation undertaken after August's update – and there's further good news for the advanced manufacturing and engineering (AME) sector.

The lengthened 'use it or lose it' period for apprenticeship levy funding will be especially welcome to employers in AME. The government's own research, published today along with the new guidance, shows that AME employers' apprentice recruitment behaviour will not be especially affected by the introduction of the levy – they will take on the number of apprentices they need to meet their skills needs, because overtraining is so expensive when things like supervision, wages and equipment are taken into consideration. As we've always known, the report also shows that engineering employers do not see much of an alternative to apprenticeship training to meet their skills needs – 26% of the sector's workforce has undertaken an apprenticeship, against just 10% of the wider workforce.

Apprenticeships on engineering frameworks and standards also tend to be much longer than the one year minimum the government is mandating. A two year window to spend levy funds makes more sense to AME than the eighteen months the government had previously intended to impose. We're happy that the government has listened to the concerns of employers from within our sector, who we know have been pressing the case for a longer timeframe since the levy's announcement – and to the concerns Semta has consistently expressed to Government on their behalf.

Extra funding for taking on 16-18 year olds will also be useful to AME employers. According to official data, engineering apprenticeships account for 27% of starts by 16 year olds, 21% by 17 year olds and 20% by 18 year olds. The additional costs borne by employers within the sector for taking on younger apprentices can be disproportionate, due to a wage premium over other sectors and due to the increased supervision younger apprentices need as the risk of accident is greater. A further 20% on top of the basic funding for the framework or standard will provide a sound incentive to AME employers to keep on bringing through the next generation of talent – vital if we're to avert a skills crisis set to be caused by half the sector's workforce reaching retirement age within a decade.

Further guidance on the apprenticeship levy will be published in December, but in the meantime, my advice would be to keep an eye on the Semta Twitter feed, on our dedicated apprenticeship levy pages, on this blog and on the Parliamentary Questions database for more information being made available in the meantime. The latter are proving to be an invaluable source of nuggets of information that would otherwise not be unearthed – for example, we now know that some of the running costs of the Institute for Apprenticeships will be met out of savings from across the Department for Education. We will, of course, continue to make the case for the full running costs to be met from the wider departmental budget – the levy is being paid by AME employers to cover the costs of apprenticeship training and provision, and that's what they want to see it being spent on.

The Semta Group is best placed to give leading information, advice and guidance to companies that are seeking to recruit apprentices or upskill their workforce. The Semta Apprenticeship Service offer a recruitment to retirement solution that looks to ensure companies can maximise their Apprenticeship Levy spend or ensure they access all available funded support, if you would like to take advantage of this free service, please do give us a call on 0845 643 9001 or email

Read 3161 times Last modified on Wednesday, 26 October 2016 10:44