Apprenticeship levy transfer scheme could be key to tackling pending skills crisis

The sector is underutilising the apprenticeship levy transfer scheme, a panel of hospitality leaders has said.

The panel gathered virtually at an event organised by Umbrella Training to mark National Apprenticeship Week. Representatives from Sodexo, GlaxoSmithKline (GSK), Luxury Family Hotels, the London Progression Collaboration (LPC) and Umbrella Training explained how businesses can take advantage of the funding opportunities afforded by the levy, discussing the benefits to both transferers and transferees.

The UK government launched the apprenticeship levy in April 2017 for all employers paying a wage bill of over £3m per year. Eligible employers must pay 0.5% of their payroll each month as a levy tax, with this money used to support apprentices into the workplace.

Since April 2019, a levy-paying employer can transfer 25% of their levy funds to another employer to be used to train an apprentice. Any unspent monies in levy funds is lost and returned to the Treasury.

The levy transfer scheme is designed to support SME businesses who are not paying the levy and do not have access to additional levy funding to help develop their teams.

However, according to the London Progression Collaboration, recent research conducted by London councils found that only 46% of levy payers in London are planning to spend more than half of their levy in the next year.

Jack Gibson, senior business engagement officer at the London Progression Collaboration, said: "While this research only relates to London, there is so much levy funding that is left unspent. There is lots of opportunity here for businesses to use their funds to support their industries."

He also explained how large organisations are helping smaller businesses by transferring their funds. He said: "Levy payers want to transfer for different reasons. They want to help their sectors, build capacity and support social mobility or CSR reasons. They are looking for businesses that share the same or similar values."

Simon Maguire, managing director at Luxury Family Hotels, whose businesses benefited from a transfer from Compass Group, said: "There isn't enough knowledge about it. I was fortunate to hear about it through Umbrella, but I would not have known anything about it otherwise. Given everything that is going on around us, I think hospitality businesses should get to a stage where they are all competing for this."

He added: "I couldn't believe that we could train so many staff and somebody else was going to pay for it."

Suzy Read, learning and development manager at Sodexo, added: "It made good business sense for us to do this and it works hand in hand with how we support local communities. It's a great example of how we can add social value as an organisation and, at the moment, we are encouraging other large organisations to do the same."

Jo Simovic, chief operating officer at Umbrella Training and event host, added: "We are constantly trying to let people know that they can have access to this. This can play an important part in the development of organisation people strategies. The support is there and it is 100% fully funded."

With the sector expected to face an increasing skills shortage post-recovery, hospitality businesses were urged to focus on their capacity for skills building now.