CII marketing director Ian Simons on how the industry needs to rise to the apprenticeships challenge
Chancellor George Osborne’s Autumn Statement confirmed that from 2017 all UK businesses will be subject to a new levy of 0.5% of their paybill to provide centralised funding for apprenticeship training. Smaller firms will effectively be exempted, since all employers will receive a £15,000 allowance, meaning any firm with a paybill below £3 million will not have to pay.
But the rest, by 2017, will be funding apprenticeships whether they have any themselves or not, and those that do will no longer have to pay for any apprenticeship training costs above their levy contribution.
It will be a question of ‘use it or lose it’. Sectors such as manufacturing and construction, with their historically strong focus on apprenticeships, shouldn’t find it hard to increase them. But for other sectors – such as insurance – in which apprenticeships have formed a relatively small (but increasing) part of training and development strategies, firms will need to think hard about what apprenticeship models they want to adopt if they are not to see their contribution being used by other companies.
Some firms who will be paying for apprenticeships in 2017 currently have no apprentices at all, and others have small numbers in specific functions. Few large insurers or brokers currently employ enough apprentices to match the contribution they will pay under the levy.
The government will also tighten the rules on what can be called an apprenticeship, and employers will only be able to use the funding to pay for training under approved apprenticeship standards. These new standards have been created by employers, for employers, with the support of professional bodies like the CII.
Historically, the white collar sector in general has tended to develop school leavers and graduates with a mix of local training and formal qualification, rather than structured apprenticeships. And there has been a poor understanding of their value among those starting out careers in those industries.
But it doesn’t have to be that way. In countries such as Germany and Switzerland, apprenticeships are well established, universally understood and valued within the insurance sector. So it’s not a fundamental problem with the industry or the expertise needed to become a professional within it. It is a problem of perception and ownership. By requiring all businesses to pay for it, the government is driving the supply side of the equation, and firms have the opportunity to shape the demand.
This means taking ownership of the creation of meaningful apprenticeship standards and, critically, the longer-term career paths for much larger numbers of this new cohort. Apprenticeships are not, and should not be seen as, a low-level poor relation to degrees.
The CII has worked with employers to ensure that the standards, training, accreditation and review of insurance apprenticeships are of a quality that we can be proud to define the future professionals of our industry.