Special Report: ‘Don’t panic over how to spend apprentice funds’

Special Report: ‘Don’t panic over how to spend apprentice funds’

The opportunities and challenges presented by a new national approach to apprenticeships were the themes of a Business Breakfast. Robin Searle reports

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‘Don’t panic over how to spend apprentice funds’

Travel companies that are required to pay a new apprenticeship levy have been urged “not to panic, but not to be complacent” over how to spend funding created by the new tax.

The levy comes into force on April 6, with all companies with a pay bill of more than £3 million being required to pay 0.5% of that bill into a fund, which can then be spent only on apprenticeships.

Speaking at a Travel Weekly Business Breakfast on the subject, Annette Allmark, director of strategic policy at workforce development organisation People 1st, reminded delegates that funds would remain in a company’s account for 24 months before being reallocated.

She said: “Any remaining funds will go into a pot to fund apprenticeships for companies outside the levy, but our advice for travel companies is not to panic about how it will be spent.”

She added: “They should avoid being complacent, but there is time for them to work out how to embed apprenticeships in order to achieve their overall strategy.”

Mark Wooding, head of leadership and professional development for Virgin Holidays and Virgin Atlantic, said the company was looking to “start slowly” before building up its apprenticeships by 2018.

He said: “We have offered apprenticeships since 2012 and this year we will have a fairly low-level scheme around our retail consultants, but we are aiming to ramp it up considerably in 2018 and look at apprenticeships at all levels of the business.

“We have a very ambitious agenda focused on early careers, and hopefully by next year we will be in a position to become an employer-provider and drastically increase our scheme’s numbers.”

Mari Harrison, head of organisational development, talent and resourcing for Thomas Cook, said: “This levy will encourage a lot of companies who don’t offer apprenticeships to do so.

“Some of the big retailers will have phenomenal levy bills, so will have to ensure they areseeing returns.”

Small firms urged to choose the right training provider

Smaller companies wanting to take advantage of increased funding to develop an apprenticeship programme should shop around to ensure they are working with the training and assessment providers that best meet their needs.

Travel companies will be able to select approved suppliers from a Register of Apprenticeship Training Providers, including those given a gold standard by People 1st.

Annette Allmark of People 1st said: “Selecting a good provider is critical, and you should be discerning. It is an employers’ market and you shouldn’t just take the first option, even if it is a supplier you have worked with for years.”

Vicki Wolf, education partnerships manager at Abta, said the association would be holding a second day-long conference on apprenticeships in the autumn to offer advice to its members.

Multi-brand travel firms told to check levy liability

Travel companies with linked businesses and brands, and those which employ seasonal workers, were urged to check if they will be liable to pay the apprenticeship levy.

Small and medium-sized businesses with a pay bill below £3 million are exempt from paying the levy – but experts warned that those with a number of connected businesses or seasonal workers could be liable once the combined wage bill was calculated.

Annette Allmark of People 1st said: “Companies with connected businesses, or interest in assets or profits of other businesses, can be liable, and with seasonal employment that liability could also change over the course of a year. We would advise any companies that might be in this position to talk to HMRC to ensure they are prepared.”

Other outstanding issues discussed at the breakfast included how unused levy funds would be allocated and how travel companies with employees in England and one or more of the devolved nations could deliver a consistent approach.

Allmark said: “Unused levy payments will be used to fund apprenticeships for non-levy payers, and the government is in the process of deciding where that money will go.

“We will be making the case for ensuring that funds remain within the sector and go to companies in the pipeline of levy payers.”

On delivering apprenticeships within devolved nations that have responsibility for how levy funds are spent, she added: “Each of the nations has individual strategies for large employers, which does not make business sense.

“We are working with the devolved nations on a practical level, but we continue to make the point that if you are a national company (with staff in different countries), there must be alignment of standards

Virgin Holidays seeks to attract local talent

Virgin Holidays is to focus on the community around its head office in Crawley as it looks to recruit young talent from different backgrounds.

Mark Wooding said the operator would actively recruit from local schools as it aimed to develop a diverse and representative workforce. “We want to be seen as a modern and relevant employer, and that means attracting people from all backgrounds,” he said. Funding overhaul ‘offers opportunity to tap into talent’

Virgin intends to develop its early careers agenda in the coming years, with a range of apprenticeships and training schemes to showcase long-term career opportunities within the company.

Thomas Cook is also looking to expand its current apprenticeship scheme, with an existing focus on retail and head office schemes being extended to options for cabin crew.

Funding overhaul ‘offers opportunity to tap into talent’

Changes to apprenticeship funding and delivery offer an opportunity to “break taboos” and embed apprentices within organisations, delegates were told.

Angela Williams, vice-president for human resources at BCD Travel, said: “Our clients demand experience and expertise, but our managers are recognising the benefits that apprentices can bring to a mixed team.

“This focus on apprenticeships can help to change the demographics of travel, and it is also an opportunity for those in both leisure and corporate travel to showcase opportunities in the industry and really tap into the talent pool.”

Mark Wooding of Virgin Holidays said the new approach offered the opportunity to overcome the “stigma” that sometimes accompanied vocational apprenticeships.

Thomas Cook’s Mari Harrison added: “If we get this right, it will be a real step forward in professionalising the industry.”

See our gallery of the event


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