And the fund has now created more than 150 new apprenticeships at small to medium-sized businesses across the region.
The West Midlands Combined Authority (WMCA), which set up the fund, says the £5m milestone is just the start – it is hoping to secure up to £40m to rejuvenate apprenticeships across the region.
Local people are already benefiting from the fund. Hockley Pattern and Tool Company Ltd, of Halesowen, took on four apprentices in September thanks to the fund, which pays for their training costs (see case study below).
Andy Street, the Mayor of the West Midlands, said:
“We’ve made excellent progress with the apprenticeship levy since our £69m Skills Deal agreement with Government last summer.
“We knew we could make a real difference to people’s lives in the region by reinvesting money in the West Midlands which would otherwise have been lost to central Government in London, and using it to support small to medium businesses to meet the costs of apprenticeship training.
“Thanks to large organisations donating their unspent levy, we’re creating new job opportunities at companies who may otherwise have been unable to afford to hire apprentices.
“I’ve met some of the apprentices who have been hired as a result of our fund, and it’s clear we are making a difference to their lives. The next step is to continue to get more firms to pledge their unspent levy so we can hit our £40m target, allowing us to create more apprenticeship opportunities, benefiting both businesses and residents across the region.”
The apprenticeship levy is charged by HM Revenue and Customs on all businesses with a payroll over £3 million. The levy money is held centrally by Government, and businesses across the country can apply for a slice of that funding to pay up to 95% of the costs of training their apprentices. After a two-year period, unspent levy contributions are ‘sunset’ and retained by the Government.
The £69m Skills Deal agreed with the Government in summer 2018 – the first of its kind in the country – set up the Apprenticeship Levy Transfer Fund by allowing the WMCA to partner large organisations with local small to medium-sized enterprises (SMEs). This means the large employers donate a portion of their unspent apprenticeship levy funds to the smaller companies, covering 100% of their apprenticeship training and assessment costs.
This approach keeps levy money within the West Midlands region, boosting skills, job opportunities and productivity by supporting more young people and adults of all ages into work.
The £5m contributed so far is the result of large organisations – including Lloyds Banking Group, BBC, National Express and the University of Birmingham – joining the WMCA partnership.
Jo Harris, Lloyds Banking Group Ambassador for the Midlands, said:
“Working with the WMCA to increase the number of apprenticeships and address skills gaps in the region supports our ongoing commitment to help Britain prosper.
“Access to fully subsidised apprenticeship training will mean that SMEs can recruit and train more apprentices to help their business grow. Our investment will open up new apprenticeship opportunities for people across the West Midlands, enabling them to develop the knowledge, skills and behaviours needed to succeed in their careers.
“I would encourage other large businesses to help to boost the local economy by donating their unspent levy to smaller employers.”
Cllr George Duggins, WMCA portfolio holder for productivity and skills and leader of Coventry City Council, said:
“This is a great milestone and shows we’ve made a strong start in using levy money locally to create new apprenticeship opportunities.
“Now we want to accelerate our progress to create hundreds more apprentices and build up the funding available to SMEs to take on new apprentices or upskill their existing staff with apprenticeship qualifications.”
The WMCA is now calling on employers who may not have considered hiring apprentices to tap into the Apprenticeship Levy Transfer Fund. Large organisations are also being encouraged to get in touch to discuss transferring their unspent levy. For more information, visit www.wmca.org.uk/apprenticeship-levy or contact apprenticeships@wmca.org.uk.
Case study – Levy Transfer helps Halesowen tool manufacturer hire future engineers
Hockley Pattern and Tool Company Ltd, of Halesowen, specialises in the design and manufacture of tooling for composite and metallic parts for the aerospace, automotive, defence and nuclear sectors.
Founded in 1979, its prestigious clients include BAE Systems, Jaguar Land Rover, Rolls-Royce, GKN and McLaren.
The company has more than 55 employees at two sites and took on four apprentices at its Lodgefield Road premises at the end of September, thanks to the WMCA’s apprenticeship levy transfer fund, which is paying for their training in full. They are currently learning how to operate computer numerical control (CNC) machines and manual machines used in patternmaking.
Production manager Alan de Grey said: “When we found out about the fund, we realised it was a great opportunity, both for our apprentices and for our business.
“As well as making sure they have the skills needed to do their job, we’d like our apprentices to develop their careers within the business. They’re already showing great potential, and we see them as the technical engineers and project managers of the future.
“We wouldn’t have been able to take as many of them on without funding from the levy transfer, which is enabling them to gain practical and theory training from Dudley College.”
Apprentice Tyler Kay, aged 17, from Upper Gornal, said:
“The WMCA scheme is very useful for young people like me, as it allows us to gain valuable skills and experience in the workplace. It helps to kick-start our career in the engineering industry. Without the funding it wouldn’t be possible for me personally to get such a good apprenticeship and gain some great skills.”
Apprentice Derry Naylor, aged 16, from Cradley Heath, said:
“Thanks to the WMCA and the outstanding Dudley College staff, I have the opportunity to become an engineer. If it wasn’t for the funding, I wouldn’t be working here. This job is perfect for me because it’s local, the pay is great, and I can learn everything needed to become a mechanical engineer. This job will help me to make my dream of owning a nice car and house come true.”
Apprentice Warayut Muensai, aged 16, from Pensnett, said:
“The funding through the WMCA scheme is the start of a great future in the engineering industry. I have managed to get an apprenticeship in a really good company, while exploring different sides of the industry – aerospace, automotive, and in future, nuclear too. This is a fantastic opportunity for young people like me to have a good, sustainable job. We learn while we are getting paid and go to college two days a week to learn the theory side of work.”
Hockley Pattern and Tool Company’s application for levy funding was supported by training provider Dudley College, which is delivering the training for all four apprentices.
Article credit: West Midlands Combined Authority