We welcome the opportunity to respond to the consultation on the introduction of the apprenticeship levy in Scotland. We support the proactive approach taken by the Scottish Government in seeking to utilise the levy to foster skills investment and inclusive growth. However, the levy should not be used to merely subsidise the budget for existing skills and training programmes. It would be a wasted opportunity if this additional revenue went only to ‘top-up’ existing Skills Development Scotland (SDS) budgets in order to deliver existing programmes. The levy offers a unique opportunity to improve support and tackle specific issues within the system.

How should the apprenticeship levy be used?

In response to the specific questions of the consultation document, we would advocate for using the levy for priorities along the lines of question 5; assisting unemployed people and helping workforce needs of employers. This would help to address three key issues identified within the skills system: a cluttered landscape, a failure to engage those furthest from the labour market and the equalities agenda.

Cluttered landscape

The cluttered landscape means that employers are not always aware of the support available to them, or where they can find assistance. There are also additional issues with disparity in practice from one local authority to the next, meaning that national organisations find it difficult to identify and secure support across their operational areas. There is potential for the levy to be used as a glue to streamline the system, targeting specific employers and bringing together available support in a clearer, straightforward manner. The levy presents an opportunity for the Scottish Government to re-align the ERI and the expanding apprenticeship family and to invest more in those who are the most distant from the labour market. We would advocate expanding the ERI, especially if expansion could be combined with new emphasis on ensuring increased apprenticeship starts from target groups. Given the high levels of retention on the CJS programme, there may be scope to reach-out to CJS employers to highlight ERI and apprenticeship routes in order to promote greater transition from CJS to MAs and to encourage recruitment of disadvantaged groups.

Equalities

Despite new emphasis on equalities within Modern Apprenticeships, symbolised by positive developments such as the Equalities Action Plan and partnership-working with Who Cares? Scotland and BMEIS, occupational segregation remains a constant feature of skills intervention programmes. Only 3.9% of apprenticeship starts in Scotland in 2015/6 were disabled and women accounted for only 5% of engineering apprenticeship starts. In 2015/16, 74% of MA frameworks had a gender balance of 75:25 or worse. Close the Gap research has highlighted gender inequality in skills and training and suggested important measures to address occupational segregation. SDS and the Scottish Government should foster deeper collaboration with the third sector to harness such expertise throughout the design and delivery of programmes. The third sector occupies a position of trust with marginalised groups and thus partnership working can facilitate better outcomes. The levy could be used to find more structured ways for the third sector to support more of the under-represented groups on to apprenticeships. This support could take a variety of forms, perhaps pre-apprenticeship support by aligning pre-existing support or the development of something more focussed. Through working with SDS and the Scottish Government, there may be possibilities for greater streamlining between Community Jobs Scotland (CJS) and apprenticeships. This would involve making sure that the sector is able to create and support meaningful apprenticeships and support employers to put young people, who have come through CJS, on to apprenticeships. It is also worth remembering that the Third Sector is also supportive of getting more involved in Apprenticeships and there may be scope to develop this role over time. The success of CJS in engaging with marginalised groups and promoting opportunities for all should provide something of a model to replicate within other projects. CJS has a proven track-record in helping those furthest from the labour market and there may be scope to realign CJS as both a means of obtaining an employment outcome in and of itself, while also enabling CJS to become a pre-apprenticeship option.

Modern Apprenticeships in Scotland

Modern Apprenticeships in Scotland are subject to far-reaching, ambitious targets. We believe that current targets should be maintained, rather than increased further. Increasing the targets for apprenticeships does little to improve the quality, nature and inclusiveness of MAs in Scotland. Numerical targets are an arbitrary measure of success and ignore other measures of fundamental importance, such as attainment, responsiveness to employer needs and equalities. Often such targets lead to an increased reliance on lower-level apprenticeships, rather than those with the most economic and social value, as these apprenticeships are easier to recruit and the least-expensive to procure. The goal should not just be more apprenticeships but apprenticeships which meet both current and future labour market demand. When the focus shifts to the goal of meeting politically-defined targets, those who require additional support may be ‘parked’ in favour of those closest to the labour market. The hardest to reach are not well-served by increasing targets, especially when combined with restricting budgets and to increase targets further would be at odds with the equalities agenda.

The third sector and the levy

The levy presents an opportunity to assist those individuals and communities supported by the third sector. From our estimates, around 75-80 large third sector organisations will be affected by the levy, with a total estimated levy of £2.3million. Therefore, as net contributors to the levy and key partners in employability programmes, the third sector is an important voice in this debate. The sector believes this is an important opportunity to make a positive difference to peoples’ lives in Scotland. Some organisations within the sector have some reservations around the levy due to the fact the levy risks charitable funds being redirected out of the sector in order to subsidise private sector employers. During a period of increased scrutiny around donations and fundraising, some organisations understandably have an increased awareness of how they are spending their money. However, it will be more palatable to organisations if the levy is directed towards assisting the most disadvantaged into sustainable employment and providing opportunities for the long-term unemployed. To this end, the objective of the levy should be to enhance the current system of support.

Conclusion

There are many options for the levy in Scotland but we feel the most positive usage would be to provide more opportunities for under-represented groups. Directing the money towards the equalities agenda and employer awareness will facilitate this goal. In conclusion, our specific asks would be:

1. Explore new options for CJS as a pre-apprenticeship tool and assess how greater levels of transition between CJS and MAs can be facilitated. Better linkages between CJS and other programmes can lead to increased representation of target groups within apprenticeships and would also assist in streamlining support.
2. Use the levy to reach out to employers from the CJS programme, highlighting further opportunities for training and highlighting the benefits of apprenticeships for individuals who have completed CJS. This would also involve expansion of the ERI, more engagement with the third sector and greater awareness raising of support available.
3. Both of the above asks will help to ensure apprenticeships and employability programmes are aligned with the inclusive growth agenda by providing opportunities across Scotland, tackling inequality and addressing long-standing barriers.

Contact: Ruth Boyle, Policy Officer Scottish Council for Voluntary Organisations, Email: ruth.boyle@scvo.scot Tel: 0141 465 7532