2 November 2015 | By Dom Gill Community, Opinion

Building on success

More information about the Apprenticeship Levy is needed, but it could drive quantity over quality – and be detrimental to apprenticeship schemes already in place.

Apprenticeships have been one of the key successes of recent UK economic policy – as both a proven means of addressing skills shortages, and a viable alternative to graduate recruitment for both large and small businesses and thousands of talented jobseekers who might otherwise have fallen through the cracks.

Microsoft was one of the first IT companies to throw its weight behind apprenticeships. Since 2010, we’ve helped more than 7,000 young people across the country start a sustainable IT career in around 5,000 Microsoft Partner Network companies, which are overwhelmingly SMEs. 

This year we expect around 4,500 new starts to contribute to this eager, well-trained and cost effective new talent pool. And the model is being replicated in many other countries that are looking to emulate our success.

We estimate around a third of all technology apprenticeship starts in the UK have been generated through this one initiative alone – an impressive achievement that we are keen to build upon. This is why Microsoft has been a leading participant in Trailblazer industry groups, using our own best practice to help shape the first apprenticeship standards, assessment objectives and the procurement of assessment organisations.

So, while we welcome the government's aims to encourage greater investment in skills and apprenticeships, we remain cautious as to what effect the proposed Apprenticeship Levy may have on that ambition. Similar concerns have already been voiced by the CBI, OFSTED and the EEF.   

In our own response to the consultation, Microsoft UK outlined several areas of broad concern:  

  1. There needs to be clearer coherence with apprenticeship policy, particularly when it comes to linking funding and design of the UK's apprenticeship system. To tackle the digital skills challenge in a meaningful way, for example, we need a range of education and skills approaches, rather than focus on the single route currently advocated by the levy.
  2. Specifically, unless the levy can be proven to reduce bureaucratic costs and takes account of already effective training routes, we feel it is unlikely to deliver the increase in employer-led training required to reduce UK skills gaps. 
  3. If the levy can only be spent on a narrow list of apprenticeships which do not meet business needs, we believe it is likely to drive down apprenticeship quality and eventually numbers, widen our skills gap and lead to short-term or low-skilled opportunities which may not create the desired long term job prospects.
  4. Finally, it is important that existing support for SMEs who choose to invest in apprenticeships remains in place. Our Partner Programme is highly valued by smaller companies in the UK due to Microsoft support, branding and accreditation, but also the support with training costs that they receive from the government. Anything that reduces or risks this support, might have a detrimental effect on the very businesses that need it most.  

For all these reasons, more information is urgently needed on the levy: its rate, scope and application; what digital vouchers can be spent on; how this will fit with the apprenticeship standards set in 2011; and how existing initiatives such as our own will be taken into account – when they have already made a proven impact and provide a solid foundation on which to build.

Microsoft UK remains passionately committed to apprenticeships, and we welcome the chance to contribute more to this discussion.

Next post: Exchanging fortunes

Previous post: Mobile's giant leap