Give employers ownership via tax system

More employer ownership (and tax credits) will help to ensure that apprenticeship schemes drive the economy forward, says Doug Richard

National Apprenticeship Week provides the perfect opportunity to reflect on how valuable but undervalued apprenticeships are in this country. I am a big believer that they need to be both championed and reworked for their ultimate importance to be appreciated.

Employer ownership is key. It not only ensures that those with expertise in a particular industry are taking the lead in shaping the training of future experts, it also means that employers have a greater sense of accountability to make apprenticeships – and, as a result, their apprentices — as impressive as possible.

We must start by giving the purchasing power to employers and keeping it that way. Rather than the state taking the lead in funding apprenticeship training, employers should have a direct working relationship with providers. Employers need to be given the money and the authority to buy the training that they think is best.

It makes perfect sense for those who ultimately require and benefit from the skills that apprenticeships are delivering, to be the main decision-makers surrounding training. A high standard can then be monitored and controlled by the people at the heart of the business.

To ensure value for money, employers should be allowed to buy from approved suppliers.”

However, this funding should not be given to employers unconditionally. The payments should be granted depending on whether workers pass an external examination at the end of their apprenticeship. This is a great incentive to ensure that the training is effective.

This, in turn, proves how essential it is for apprenticeships to be measured more accurately. We need to follow a similar technique to the university degree system, whereby students’ achievements are recognised because they have either met or exceeded a clear criteria. This is an area in which current apprenticeship schemes are falling short.

To ensure value for money, employers should be allowed to buy from approved suppliers – and then would only receive money if their apprentices passed an external examination at the end of training.

This concept builds on the increase in employer ownership and ensures that the achievements of apprentices and employers are more easily and successfully judged. It is the prime incentive for employers to make a success of apprenticeships.

The government is already testing a similar programme that allows employees access to subsidies. This is certainly a step in the right direction but much more thinking needs to go into empowering employers.

We need too to focus on securing workforce tax breaks. The Association of Employment and Learning Providers quickly rejected my recommendations; however, I am still convinced that tax credits are integral to the success of apprenticeships.

Apprenticeships are valuable initiatives and must be made as attractive as possible to employers. Offering workforce tax breaks is an excellent way to make that happen. This would allow the state to play a significant part; it could show its support for the work employers are doing whilst the ultimate authority on training and designation of funding is left with the employers.

I am proud to have been so heavily involved in the development and progression of apprenticeships into the 21st century workplace. An increase in employer ownership and a change in enforcement around tax credits will go some way to ensuring that these schemes continue to produce talent that will feed into the success of a business, and, in turn, the wider economy.

Doug Richard is an entrepreneur and author of The Richard Review  of Apprenticeships


This article was published in a special 16 page National Apprenticeship Week 2013 supplement (click on image below to download 15mb PDF

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