Apprenticeship Levy: Tax or dividend?

Dr David Lowe

By Dr David Lowe, programme director, MSc Management Practice, Alliance Manchester Business School

Regrettably, confusion has cast a cloud over a fantastic opportunity that could be generating bumper dividends for UK businesses, workers and, indeed, UK plc as a whole.

Many businesses are currently treating the Apprenticeship Levy as an accepted loss, or a backdoor tax, rather than an opportunity to ramp up their capabilities.

Many are also not aware that the Apprenticeship Levy is much more than a training springboard for career entrants and vocational trades, as it now enables organisations to upskill the managers, leaders and decision makers responsible for growth and job creation.

With findings from the Chartered Management Institute (CMI) indicating that 43% of UK managers are ineffective or highly ineffective, and with the problem contributing to weak UK productivity, level 7 senior leadership development training degree courses available through the Apprenticeship Levy could provide a commercial remedy.

Inaction equals tax – engagement equals opportunity

The emergent trend of the ‘accidental manager’ is likely to be a major factor behind the poor leadership restraining UK productivity.

As a collective term for workers promoted or recruited on the basis of talent, technical ability or industry know-how without formal management training, accidental managers have raw potential but need nurturing to shape them into the best possible leaders.

Rather than writing contributions off as a loss, organisations could be using the Apprenticeship Levy to advance these workers and shape them into the leaders of the future by offering them carefully crafted management training that will underpin their latent ability with the skills needed to lead, inspire and improve business performance.

Development is the key to retaining

People jump from job to job for various reasons, such as progression, variation and continual learning – all of which is very positive.

However, the rate at which UK workers move between roles could hamper businesses.

Not only is the loss of experienced staff potentially damaging, it could be compounding the accidental manager trend with businesses prematurely promoting bright team members without giving them the necessary management tools or support.

This could impact everything, from overall organisational performance to line management.

Talent is an essential ingredient of great leaders.

As such, formalised professional training helps these key individuals fulfil not only their own potential, but the business’ own potential.

Better still, investment in the development of individuals engenders goodwill.

Goodwill creates loyalty. Loyalty turns into increased staff retention. So investment in people is worth every penny. And it will help your business grow from a foundation of knowledge.

The productivity dividend

The opportunity to place rising stars and time-served stalwarts on to carefully crafted Level 7 senior leader apprenticeship courses, is one worth taking.

MSc and MBA level programmes like those offered at Alliance Manchester Business School are CMI-accredited and carefully configured to hone leadership skills.

Course attendance can be funded for both large organisations and SMEs, either wholly or in part through funds from the Apprenticeship Levy – so in many cases companies have already paid.

Better still, the CMI’s own research indicates that the completion of accredited leadership development programmes could provide a potential return of nearly £400,000 per chartered manager.

Using the levy to upskill managers, who are core to an enterprise, could help transform the Apprenticeship Levy from a tax through inaction, into a dividend-generating opportunity.

Put simply, the benefits for business are too great to ignore.

For more information about the Apprenticeship Levy and courses for managers and leaders, please visit Alliance Manchester Business School.