On Monday 5 June 2017, the Royal Aeronautical Society’s Education and Skills Committee hosted a seminar to provide more information on the new Apprenticeship Levy for aerospace and aviation employers and training providers. Held just a few days before the snap General Election, the event provided an opportunity to learn what has happened since qualifying employers started paying the levy earlier this year, and what messages for the new Government could be passed on from the employer and education providers’ experiences to date.

Background to the Apprenticeship Levy:

The Apprenticeship Levy came into force in the UK on 6 April 2017

It underpins the Government policy to create 3 million apprenticeships by 2020. This figure can include individuals completing more than one apprenticeship

Companies with a salary bill is over £3 million must pay the levy at a current rate of 0.5%

HMRC will collect this monthly through PAYE

‘Levy-paying’ employers will be able to access funding through a digital account which is linked to their levy payments for apprenticeship training costs

‘Non-Levy’ paying employers can access funding through the Education and Skills Funding Agency (ESFA) - the Government will pay 90% of the costs of training and assessing SME apprentices.

Raising employer awareness of the Apprenticeship Levy

SEMTA, the organisation supporting skills for engineering employers, provided the keynote talk, setting the scene on work to date within the engineering sector. Christian Warden, Head of Technical Services, warned that for many employers, “The Apprenticeship Levy is the elephant in the room,” with many companies not thinking the Levy applies to them, adding, “If companies are not aware of the Levy or how it will affect their business, then they are missing a vital opportunity in terms of staff and their own company’s development.”

One vital difference between this and previous apprenticeship programmes is that the funding can be used not only for new entrants at Levels 2 and 3, but also for Levels 4, 6 (degree level) and even Levels 7 and 8 (postgraduate and PhD levels), and for existing staff, providing new funding opportunities for employers looking to upskill or reskill staff; in other words, it would be wrong to only see the levy as just for new starters.

He also added that some companies either have no overall training strategy or have not considered implementing a Levy strategy, and he recommended this as a good time for companies to review their training needs across the business to identify what staff development opportunities the levy funding could now support.

However, as Warden noted, there is still some confusion over the funding model and application of the levy funds across the devolved nations of the UK, as, while the levy is charged at UK level, ultimately the monies go into the Treasury, distributing it to the devolved nations via a different approach than will be used for English employers. This will be of significance to many larger aerospace and aviation levy-paying employers with sites across the UK which may be looking to use their contribution across all of these.

And, as access to the funding is different for ‘levied’ and ‘non-levied companies’, the whole system may seem confusing thus deterring employers, therefore more work is needed to ensure all companies, levy-paying and non-levy paying, have awareness and a clear understanding of how to access it.

There are also some unanswered questions around unused funds, for example, if a company does not use up its whole contribution for its existing apprenticeship programmes, should it create new apprenticeships that do not meet its business needs rather than lose the funding? Many larger aero employers are looking to use the funding for their supply chain, what is the best way to enable this?

Until recently the levy was not to be used for apprentice wages but the recent Conservative party manifesto implied this may change. However, what then would be the impact for training providers if this led to less funding for training costs, which can be high particularly for technical and engineering training due to the capital investment required?

Another key area particularly relevant to the aerospace and aviation sector is that using the funding for ‘licence to practice’ regulatory requirements, such as the A/B EASA Aircraft Maintenance licences, or the ATPL pilot’s licence, is not usually covered by the funding.

View from an aero engineering apprentice

From an end user perspective, speaker Alexander Barker ARAeS, Marshall Aerospace and Defence Group, highlighted how positive the apprenticeship experience can be. Now a Structural Design Engineer at the Group, he joined as an Advanced apprentice five years ago and explained how the programme had helped him prepare for his current role. One aspect was the development of hand skills and practical workshop skills at the start of his apprenticeship. Now working alongside university graduates, he can see that this has brought key benefits to his current role and an understanding of the practical implications of design on manufacturing and maintenance processes that is not experienced by many university students.

Other benefits included the targeted nature of the training he received, integration with company strategy, a sense of value within the firm, the company’s emphasis on continued employment and learning and an in-house mentoring scheme. Barker did not feel short-changed in any way by having not chosen to go to university. However, he did highlight that while it was the perfect option for him, having had a clear idea of what he wanted to do after A Levels, for some of his friends who were less certain of their career plans, university remained a good option to allow them time to develop and discover career options.

Further Education insight

Kam Dehal and Richard Brooks of East Surrey College have been working closely with local employers, including aviation, to help inform them about the changes to the landscape brought about by the Levy, highlighting some very important points for employers and training providers to consider:

Every apprenticeship will be placed in to a funding band ranging from £1,500-£27,000. Employers are to negotiate the best price for the training they require, and can spend more than their limit (topping up).

While funding is available for any age and for existing employees, additional support is available such as for 16-18 year-olds, disadvantaged young people aged 19-24 and learners who have additional learning support needs.

Funds can be used for apprenticeship training and assessment against an approved standard with an approved training provider/assessment organisation up to the funding band approved for that apprenticeship.

Funds cannot be used for apprentice wages, travel and subsistence, managerial costs, traineeships, work placement programmes, costs of setting up programme or recruitment costs.

Brooks also highlighted the important link between the Levy and new ‘Trailblazer’ Apprenticeship Standards which employer groups have been developing over the last few years. The levy can only be used for Apprenticeships which are part of the new Standard, which are set by employers for a particular occupation. Crucially, any mandatory qualifications which the occupation requires must be clearly stated in the Standard, if not the Levy funding cannot be used to cover their training costs. In other words, while the old apprenticeship framework tended to have the same criteria, the new standards will be defined by the requirements set by the relevant employer group.  They are also linked to professional registration, particularly relevant for the engineering sector, e.g. apprentices can achieve EngTech, IEng or CEng as defined by the Standard.

Organisations looking to deliver training within the approved Standards must gain formal approval through the Register for Approved Training Providers (RATP) and employers and TPs who wish to maintain existing relationships built under previous frameworks need to work together.

Finally, Brooks recommended that employers seeking to see what apprenticeships are available and approved to meet their training needs visit the Apprenticeship Portal https://www.gov.uk/apply-apprenticeship

Delivering apprenticeship training through Universities

The University of the West of England (UWE) has been working closely with the aerospace sector to deliver Degree Apprenticeships, and Dr John Lanham, Assistant Vice Chancellor, provided further insight. Again, he highlighted the important changes that the new apprenticeship policies bring in terms of the extended range of academic levels which can be covered and the 90% of co-funding available for non-levy, SME, employers. John also highlighted the importance of partnerships between employers, HE and FE to provide apprenticeships and how programme development can include introducing new programmes, specific to employer needs, as well as adapting existing programmes.

However, John also had a few notes of caution, citing that the ‘employer-led’ approach to Standards, while having many positives, did mean many HE and FE providers had not been involved in the design process with possible lack of understanding of the delivery mechanisms and educational system. There is some uncertainty around the RATP and significant amounts of learning for HEIs around the new protocols in place, what the new Institute of Apprenticeships requirements will be etc.

Lanham also highlighted a recent FE Week article which revealed that HEIs won’t be able to provide apprentice training to non-Levy SMEs, at least in the short term, following a recent decision by the ESFA to only use existing providers for non-Levy employers, most of which are not HEIs, despite the value in SMEs and Universities collaborating more closely.

Cross sectoral learning

Drawing on experience from other sectors, Matthew Warman, Manager, Learning Solutions, KPMG, provided an overview of the approach to the Levy and apprenticeship delivery within the Financial Services sector. One aspect which is proving challenging for many companies here is the 20% ‘off-the-job’ training requirement – for which the details around how it works in practice and performance-management are less clear. Again, many companies have not yet used the new system to take a long-term view of skills planning for future skills needs, and some are still unsure how to use apprenticeships for training of experienced workers. Other challenges include creating an end-to-end model for apprenticeship delivery from recruitment to delivery which includes the additional admin generated and there are some problems in getting approval for extra internal resources to deliver increased numbers of apprenticeships.

That said, for KPMG their 360° Apprenticeship programme has provided many benefits to the firm, incorporating a flexible approach in which their apprentices rotate around key business areas in client-facing roles in line with business requirements. In particular, it is helping to create a more diverse workforce: in 2016 47% of recruits were female; 23% were entitled to free school meals; 86% had been to state schools and 75% of their parents had not attended university.

AEROSPACE TRAILBLAZER GROUP

For the aerospace sector, work to set the new Standards began four years ago. Mark Donnelly of BAE Systems provided an overview of the progress which the Aerospace Trailblazer Group has made in creating the standards and some of the challenges the group has faced and how these have been addressed.

With 20 standards now approved, one of the Group’s key successes has been to bring together both large employers and SMEs, including those involved in airworthiness and maintenance alongside traditional manufacturers. Professional engineering institutions (PEISs), including the RAeS, are also part of the group, as well as SEMTA, a Group Training Association and FE and HE representatives.

Furthermore, with many similarities in programme requirements across other advanced engineering sectors, a cross-sector group has been established with the automotive, maritime defence and the wider engineering sector, helping to create common standards, which the group have named as the ‘Battersea Model’ – Donnelly explained, “A super standard, embracing a number of occupational pathways at the same level,” and meaning that an apprentice could more easily switch if, for example, their original employer was unable to continue the apprenticeship.

Another important success has been to successfully negotiate the higher tariff for the standards with £27,000 available per apprentice for example on some 42-month programmes.

A couple of key needs have had to be addressed with the Department for Education which may offer useful learning for other Trailblazer Groups which are developing standards which need to address high levels of safety, and require some element of employer sign-off that the training meets safety and quality expectations.

Donnelly explained that the current End Point Assessment regulations stipulate that this should be carried out by an independent assessor, not the employer of the apprentice. However, given the concerns around signing off safety-related competencies, the Aero group successfully argued that the employer would have to be involved in the process. This has led to an agreed ‘partial independence’ route for Aerospace Trailblazer Standards End Point Assessment – the employer will undertake a ‘viva’ style interview with the apprentice which will be quality assured by the independent End Point Assessment Organisation. Additionally, as the Standards are aligned to the Engineering Council UK-SPEC, a professional engineering institution will undertake a Professional Competence Assessment for professional recognition and engineering registration.

Donnelly highlighted some of the working principles which have guided the group and in his view have contributed to its success:

Strong collaboration across Advanced Manufacturing sector

Built around the needs of the all, including SME community

Desire to have as few Standards as possible to support consistency and to support consistency and communication/marketing to aspiring apprentices/their parents, SMEs and providers

Commitment to qualifications

Ambition to support transfer-ability of skills

Strong commitment to progression

Partial Independence at End Point Assessment – occupational and professional competence

Underpinned by an understanding of the occupational, professional and regulatory requirements of the Sector at each level of the Sector–occupational architecture created

Alignment with Engineering Council UKSPEC – long standing professional definition of competence

Aligned to and supporting the Government’s Industrial Strategy

 

DEFINING FUTURE WORK SKILLS

In summary, employers large and small and training providers need to work together to make the most of the opportunities the Levy offers. Meanwhile, Government needs to consider some of the questions that the Levy still raises to ensure employers are not deterred from the process.

Employers:

Companies need to look at what skills they require with shifting economic, technological and global environment and use the levy to plan for future skills needs, not just those of today

Employers may need change their mind-set and look at the long-term advantages of upskilling existing employees as well as recruiting new apprentices

Experience of both employers and apprentices is overwhelmingly positive

Training providers and standards:

Training providers must identify what their levy and non-levy companies require

Standards: ensure these are written to include all mandatory qualifications for which levy funding may be needed, otherwise the funding will not be available.

End Point Assessment - how and who may or should conduct these? Are there several acceptable options? One-size does not fit all

Funding mechanisms:

Apprenticeship courses in high-value sectors such as aerospace and engineering are expensive and companies need to consider negotiating the highest level of funding

The levy is not for apprentice wages. However, if Government changes this rule, what would the impact be for training providers’ ability to cover costs?

Key questions for Government and relevant agencies:

Devolved nations funding - clarity for employers particularly with sites/supply chains UK wide

Ensuring aerospace and aviation levy is used across the sector even if not fully by the levy-paying employers

Licence to practice – how can the levy support essential training for apprentices to meet regulatory requirements such as EASA Aircraft Maintenance and Commercial Pilot licences

20% ‘off-the-job’ – greater clarity on definition and assessment criteria is needed

Use of levy exclusively for apprenticeship training. Other Government plans include the introduction of new ‘T Levels’ to run alongside A Levels for 16-19s taking vocational routes which will require mandatory work placements in year 2; some employers have been arguing for the Levy funding to be made available for these as well.

Furthermore, many younger apprentices may have difficulty travelling to work for financial or practical reasons, such as no driving licence, lack of public transport, shift working. Ensuring early career apprentices can access their employer sites is also important.

Get Involved

As a next step, the Education and Skills Committee agreed that a round table event for the Aircraft Maintenance community to better understand the new Standards should be hosted by the Society.  This will follow later in the year, if you are interested in being involved please contact rosalind.azouzi@aerosociety.com

Presentations

For a full slide pack with all the information presented at the seminar, please click here.

Rosalind Azouzi and Rupinder Pamme
26th June 2017