The Apprenticeship Levy was designed with the best of intentions, but everyone knows it is not working as intended. It’s time for reform.” 

That’s according to Neil Carberry, chief executive of the REC – and as reported in the July issue of Recruitment Matters, the latest figures from its members back up his concerns. 

Although many employment agencies are small businesses, with only a few directly employed staff, they are caught up in the levy system by virtue of the temporary workers they have on their payroll. Yet 95% of respondents to an REC survey revealed they have been unable to use the Apprenticeship Levy to fund training programmes for agency workers. And due to the inflexibility, the 670 REC members who pay the levy already have £104m of unspent Apprenticeship Levy funds between them.

Some agencies have worked out ways to spend their money – on offering their recruiters the opportunities to take REC’s Recruitment Apprenticeships, for example – but it still leaves nearly 1 million temporary workers cut off from development opportunities. 

In July, the REC responded by launching a petition calling for the Apprenticeship Levy to be broadened into a flexible training levy that better reflects modern working practices, and recognises the role both temporary workers and temporary work play in the economy.

Under this reform, temporary workers could train as forklift truck or LGV drivers, or as healthcare assistants, for example. That wouldn’t only address key shortages, cost-effectively, it would also help people grow their careers. And for many workers, it could mean the difference between earning £8.21 an hour on the minimum wage and upwards of £12.50. 

“Letting agencies access the levy funds to provide quality training to temps would be transformational for career progression, productivity and inclusion. It would be a win for government, employers and temporary workers themselves,” explains Carberry. 

“One of our members told us they would use a reformed levy to enable their staff to ‘secure longer-term sustainable employment and build their personal resilience’. We should be helping these well-intentioned employers unlock productivity in their workforce by using the levy to train temps.”

Agencies frustrated

And this is not the only example the REC highlights. In its ‘Training for Temps’ report, it puts a spotlight on a small business specialising in warehousing, drivers and industrial sectors, which has enough money in its levy pot each year to train 35 LGV drivers. It would like to train others up as bricklayers, electricians or mechanical engineers too. 

“If the government were to introduce a training levy with funds available to be spent on good-quality training, this would benefit the worker, the business and the economy,” they said.

“As skills shortages increase, supporting good-quality skills development is imperative. We must ensure that today’s agency workers are the skilled permanent employees of tomorrow,” said another.

And in a video to support the REC’s campaign, Robyn Holmes, founder and managing director of recruitment agency Prime Appointments, explains that temporary staff are the people who need the training opportunities most, as many need to be upskilled to help them get work. A lot of people approach the agency wanting to be carers, yet they can’t afford to do the training required under their own steam. 

“We would be delighted if we could use the Apprenticeship Levy to train them. It would enable people to go out and do a job that is important for society and one they love,” adds Holmes.

Life changing opportunities

The video also highlights stories from temporary workers put at a disadvantage in the current system. They include semi-retired Paul Henderson, who can’t afford to renew his counterbalance forklift licence, which he previously held for seven years; and Natalie Smith, who does temporary work on top of two other jobs so she can balance work with childcare – she would love to have the relevant certificates to progress in healthcare support. 

And then there’s Andrew Brown, a 19-year-old factory worker, who likes the work and is keen to learn. He’s identified a food hygiene course, a forklift licence or engineering qualifications for manufacturing management as ways to progress and give him more fulfilment. As a temporary worker, none of them are currently an option. 

The time is right for change

The REC’s report has a foreword by Matthew Taylor, CEO of the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), who wrote the Good Work Plan for the government, which sets out their vision for the future of the labour market.

“As the government continues to evaluate and review the apprenticeship system I hope it will give proper consideration to the well-made argument in this timely report,” he said. 

When he was running for the Conservative Party leadership, Sajid Javid spoke of his ambition to broaden the Apprenticeship Levy into a wider skills levy. And in May, Work and Pensions Secretary Amber Rudd spoke at the REC’s offices to call for a new government focus on helping people to progress in work, moving to higher-paid and higher-skilled roles. 

The recruitment industry has a vital role to play in creating a progression nation, to help generate growth and prosperity for all. But the contribution they could make would be hugely amplified if the government broadened the scope of the training Apprenticeship Levy funds could pay for. 

Lend your voice to the campaign, and sign the petition to broaden the Apprenticeship Levy. Find it at change.org.

Why temporary workers currently fall outside the Apprenticeship Levy

An apprenticeship lasts a minimum of 12 months but 960,000 out of 1,020,000 temp and contract workers in 2017/18 were on assignment for less than 12 months. 

Even the 2% of workers on contracts for 12 months or more would only be able to undertake an apprenticeship if they knew the length of their contract at the outset and, because of the nature of temporary work, this is rarely the case.

Accredited apprenticeship programmes demand 20% off-the-job training – something that is at odds with the very reasons temp workers are employed: to meet peaks in demand, cover leave or absences and access key skills in the short term.

Visit the REC Apprenticeship Levy hub to see how you can help