It’s now more than four months since the government’s Apprenticeship Levy has been in place, but the experience for some SME manufacturers has been less than smooth so far.
From April 2017, the Apprenticeship Levy obliged UK businesses with wage bills in excess of £3m to pay 0.5% of that bill towards funding the creation of three-million new apprenticeships.
On paper, it certainly sounds like an admirable – and achievable – mission.
However, like so many past and present government initiatives, the finer details are still unclear, with little signs of further clarification.
Nottinghamshire-based Icon Aerospace Technology is acknowledged as a world leader in polymer technology, engineering innovative solutions to connect separate product faces.
The business has the ambitious goal of doubling revenue by 2019. It is currently working through an order book worth upwards of £150m (based on Teal Group data), and has created 100 new jobs over the past 18 months.
For this growth to be sustained, the management team places a large emphasis on skills and training – particularly in upskilling its 285-stong workforce.
CEO, Tim Pryce, recently sat down with The Manufacturer to discuss what the Apprenticeship Levy means for an SME – albeit swiftly growing into medium-sized.
In a broad-ranging interview with The Manufacturer, Tim Pryce also discussed:
- Aerospace supplier advises how to move up the value chain
- Long-term survival of UK manufacturing rests on NPI
- What sets UK manufacturing apart from the rest?
- What could a Knowledge Transfer Partnership offer your business?
- Customer relationships key to mitigating Brexit risks
- Insights into the future of British aerospace
“Icon is providing some 1,800 man-hours a month of training across the board, around 80% of which is focused around long-standing employees, and none of it can be claimed against the Apprenticeship Levy. Why? Because courses have to be run by certain bodies, and they either haven’t got their courses ready or those courses aren’t appropriate for us.
“I think the intent of using money and encouraging companies to invest in employees’ skills is absolutely great; however, certainly in its first year of operation, the levy seems to be nothing more than an additional tax.”
Currently, Icon has 12 people undergoing NVQ Business Improvement training as part of its continuous improvement programme, branded i4 – Improvement, Insight, Intelligence, and Inspiration. Several more are taking NVQs in management and supervision. As a result, workers become capable of higher level tasks.
Valuable to the business they may be, yet, these are the sort of qualifications currently not recognised by the Apprenticeship Levy, therefore Icon can’t claim against them.
It’s ironic, Pryce noted, that the more successful Icon becomes – creating new jobs, long-term careers, contributing to the local community and the national economy – the more it will be penalised by the Levy in its current form.
