Neil Robertson, CEO of The National Skills Academy for Rail (NSAR) has warned that rail organisations could be missing out on substantial benefits if they are unprepared for the new apprenticeship levy to be introduced in April.
The new regulations mean that employers with wage bills of more than £3million must put 0.5% of their payroll into the levy to fund new apprenticeships. The Government’s aim is to double spending on apprentices in England. Specifically, it is looking to create an additional 30,000 rail and road apprenticeships by the end of the current parliament.
A recent survey* suggested that around a third of employers liable to pay the new Apprenticeship Levy from April are not even aware of its existence. Only a further third of organisations feel fully informed about the new rules with as many as 28% still unsure whether it would affect their business.
Explained Neil Robertson, “The effects of the new levy on the rail industry will be significant. If managed and run correctly, the new changes need have no adverse financial effects. If just ignored, the levy will become just another government tax. That said the good news is that many rail companies are responding in a practical and positive way to these changes.”
Neil is also positive about the opportunities the levy might create. He explains, “The government has promised that the levy would give millions a step on the ladder of opportunity. And the employers we’ve spoken to that have already got to grips with it have confirmed that it is likely to encourage them to hire more. But it is also good news because it can help provide greater control of apprenticeship programmes and improve their quality. It will also place greater focus on apprenticeship opportunities which will help fill vacancies, something that can be a challenge.”
NSAR was established to help the sector develop a more skilled and productive workforce to help deliver a modern ‘world class’ railway. It is estimated that up to 100 organisations servicing the rail industry will come under the new levy proposals.
As part of its services to support the introduction of the levy, NSAR has designed and built a levy planner tool to help organisations assess its effects on their business. The planner enables them to quickly model the apprenticeship programmes to fit their needs, revealing how much of the levy contribution can be recovered. Rather than focusing on a one-year period, the planner’s multi-year capability helps organisations produce a strategic apprenticeship resource plan covering multiple year periods such as a rail franchising period. This enables them to optimise the levy contribution to determine the right mix between new entrants and up-skilling to achieve apprenticeship numbers. It will also help support the development and investment in the skills for the future.
NSAR member Go-Ahead, one of the UK’s leading public transport providers for both road and rail, recognises the importance and changes heralded by the new levy. Explains HR Director Val Proctor, “As a forward-looking employer, we always look to invest in the long-term training and development of our people. We also place great importance on having a collaborative approach to create long-term value for the company and its employees. That’s why we see the introduction of the levy as being about a whole lot more than just a new tax. Instead, we’re working with the government and our partners to use the levy to help us create a better workforce all round. The NSAR levy planner, with its ability to model apprenticeship requirements and effects throughout our individual franchise agreements, is proving to be a critical part of this operation.”
The levy planner is available to all NSAR members together with a range of consultancy services to ensure they are ‘levy ready’. From May, employers will be able to draw vouchers from the levy to fund apprentices.
To find out more about NSAR’s strategic Levy planning services visit www.nsar.co.uk or contact email@example.com
* Feb 2017: City and Guilds skills group poll of 500 senior decision makers from a range of organisations.