Apprenticeship levy fund hits £5m milestone
The Apprenticeship Levy Transfer Fund set up to boost 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.
Hockley Pattern and Tool Company, based in Halesowen, took on four apprentices in September thanks to the fund, which pays for their training costs.
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, benefiting both businesses and residents across the region.”
The apprenticeship levy is charged by HM Revenue and Customs on all businesses with a payroll over £3m. 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.
WMCA says 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, the University of Warwick 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.”
