News analysis with BESA
Levy not to blame for fall in apprentice numbers
Teething problems with the Apprenticeship Levy are not the main reason for disappointing apprenticeship numbers, according to the Building Engineering Services Association (BESA)
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25% fall in apprenticeship starts this year is a bitter blow to the Government’s plans for creating three million new apprentices by 2020 and led to heavy criticism of the Apprenticeship Levy. The Department for Education (DfE) revealed that new apprenticeships had dropped to 194,100 in the first half of the current academic year, but said the success of its strategy could not be properly judged until the full year’s figures are released in November. Business leaders were scathing and the CBI called for the Apprenticeship Levy to be scrapped. Many SMEs said they were struggling to access the funding and that much of the training on offer by the 2,500 recognised providers was not fit for purpose. However, BESA believes the Government is, more or less, on the right track. “The figures are disappointing, but
apprenticeships are going through a time of unprecedented change," said BESA President Tim Hopkinson. “It is not just the Levy itself that is at fault – employers are finding the changes challenging and too many training providers still deliver courses that are simply not relevant to the modern workplace. “SMEs, in particular, are just starting to get their heads around how the funding from the Levy works – and the impact of larger employers passing on a share of their funds to supply chain partners has not kicked in yet. That could be a game-changer,” he added.
Targeted
“We have seen some very positive work by employers, but there also needs to be much more
support for training designed by employers for employers. This is the model for the New Standard apprenticeships, which are just getting up and running and must be backed up by more fleet-footed course providers willing to offer practical and targeted training. That is where the DfE could intervene,” said Mr Hopkinson. Rather than scrapping the Levy, which is designed
to raise £3bn a year to fund the training of a new generation of skilled workers, there should be renewed focus on making sure employers can access the funds, according to BESA. Director of BESA training Tony Howard (pictured) appealed to the DfE to make the system more flexible by increasing funding to the training providers able to deliver specific courses for industries in most need. “Currently, employers are restricted to a relatively
LATE PAYMENT PETITION PRESENTED TO DOWNING STREET
urgent action on retentions and late payment in construction. The delegation was led by Peter Aldous MP, who has introduced a proposed Bill to Parliament seeking to reform payment practices. The Bill is scheduled to have its second reading in the House of Commons on Friday, April 27. The petition presented to the Prime Minister
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calls for the Bill to receive a fair hearing in government time and for its measures to be adopted to bear down on the growing problem of small business debt. The collapse of construction giant Carillion – just
six days after the ‘Aldous Bill’ had its first reading – has pushed the issue of sub-contractor debt and unfair payment practices up the political agenda. The Bill, which seeks to amend the Construction Act so that retention payments are protected in ring- fenced trust accounts, is seen as an opportunity to minimise further damage to the industry in the event of any future insolvencies. “We are stepping up the pressure on this crucial
issue,” Mr Aldous told supporters in Parliament Square. “We are seeking to level the playing field so small firms are not continually forced to go cap-in- hand to large contractors.”
Carillion was holding £800m of suppliers’ money when it went into liquidation and this money has been designated as ‘unsecured debt’ by the company’s liquidators meaning it is unlikely to be recovered.
14 May 2018
coalition of 76 trade bodies – representing over 355,000 businesses – presented a petition at 10 Downing Street calling for
added Mr Aldous. “Construction is an essential underpinning of our lives and work, and we need to support the industry and especially SMEs to ensure future growth and prosperity. “The industry loses around £1m for each working day, mostly from SMEs. There have been proposals to stop the abuse of retentions before, but this time there is the largest coalition on fair payments ever.” The group of industry leaders who
presented the petition alongside Mr Aldous included Federation of Small Business chair Mike Cherry, Federation of Master Builders
More than £10.5bn of SMEs’ potential working capital is locked up in retentions every year and £700m was entirely lost to SMEs over the past three years. The Building Engineering Services Association
(BESA) and the electrotechnical and engineering services body ECA helped Mr Aldous develop his Bill, which has also received the support of more than 120 other MPs from right across the political spectrum. “Ironically, we were ahead of the game on this issue back in 1993 when Sir Michael Latham carried out his first review of the construction industry,” said Mr Aldous. “If his proposals had been adopted back then we would not have to be doing this now.” He said the petition was the “extra push” needed
to convince the Government to adopt the Bill and give it a significant amount of parliamentary time. “This is an unprecedented opportunity to improve the industry for the better, level the playing field for SMEs and protect thousands and thousands of jobs,”
chief executive Brian Berry, director general of the Institute of Directors Stephen Martin, and the chief executives of BESA and the ECA David Frise and Steve Bratt. “The Government will surely want to be seen to
protect SMEs and to ensure the construction industry is sustainable so it can deliver its ambitious plans for housing and social welfare,” said Mr Frise. “SMEs are crucial to the government’s built environment and infrastructure programme. “Retentions and delayed payment put thousands of firms at risk of insolvency and undermine their efforts to invest in skills, training and improved productivity.” Mr Frise also paid tribute to the Specialist Engineering Contractors’ (SEC) Group, saying that its two-decade long campaign against late payment had paved the way for the Aldous Bill.
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