Consultation on the Scottish Government response to the introduction of the UK Apprenticeship Levy

6. Support to Move into Employment

6.1. This section presents the findings relating to Question 5, which asked:

"Should Apprenticeship Levy funding be used to help unemployed people move into employment, and to help meet the workforce development needs of employers? a) Yes b) No

Overall views

6.2. Nearly all of the respondents (94%) addressed Question 5. Of these, around two thirds (66%) either ticked "yes" or expressed clear support for the view that Apprenticeship Levy funding should be used to help unemployed people move into employment, and to help meet the workforce development needs of employers.

6.3. Just over a quarter (28%) either ticked "no" or expressed clear disagreement with the use of Levy funding for this purpose. The remainder of those who addressed the question (5%) did not express a clear preference, but made other comments.

6.4. There were some variations by category of respondent. Support for this use of Levy funding was highest among respondents from the Third Sector (92%) and NHS (90%). It was lower among respondents in the Colleges, Universities and training sector category (65%) and private sector (57%), although the majority of respondents in all categories expressed agreement.

6.5. There was little difference in responses to this question by respondents' overall view of the growth ambition for MAs. 63% of those who stated that the Government's current commitment should be maintained, compared with 68% of those who believed it should be increased, expressed agreement with Question 5.

6.6. The full quantitative analysis relating to Question 5 is presented in tables A16 to A19 ( Annex 3).

Additional comments

6.7. Four fifths of those who responded to Question 5 (80%) made additional comments. There were three main themes overall:

• Benefits of, or reasons to use Levy funding to help unemployed people move into employment, and to help meet employers' workforce development needs.
• Concerns about using Levy funding to help unemployed people move into employment, and to help meet employers' workforce development needs.
• Suggestions about developments to help unemployed people move into employment, and to help meet employers' workforce development needs.

6.8. Many issues were raised within these themes, and these are summarised below.

Benefits of, or reasons to use Levy funding to help unemployed people move into employment and to help meet employers' workforce development needs

6.9. Just under half of those who made additional comments suggested benefits of, or reasons to help unemployed people move into employment, and to help meet the workforce development needs of employers. These related to the following broad areas:

• Meeting the needs of employers.
• Meeting the needs of specific sectors.
• Promoting equality and inclusion and meeting the needs of specific groups.
• Meeting the needs of individuals.
• Wider issues and the Scottish context.

Meeting the needs of employers

6.10. The most common benefit cited for this use of Apprenticeship Levy funding was that it would help meet the needs of employers.

6.11. Some mentioned generally that it would help to align support with employers' requirements, while others identified more specific benefits such as access to:

• An improved pool of candidates ( e.g. enabling selection).
• A more skilled workforce (including with basic core skills).
• Workers for areas of current skill shortages and hard-to-fill vacancies.

6.12. A small number of respondents stated that employers may see an improved return on their investment by developing tailored pathways, or that this would enable them to recover their Levy contribution. One respondent stated that it would help employers discharge their social responsibility, and another that it would benefit small employers.

6.13. Several respondents provided detailed examples from their own organisation of current or previous experience of work to help unemployed people move into employment, citing the benefits of this type of work to them.

Meeting the needs of specific sectors / specific subjects

6.14. Several respondents identified specific sectors, or particular subject areas / skills which may benefit from this use of Levy funding.

6.15. Those mentioned most commonly (albeit by small numbers) were: digital/ IT; health and social care; construction; STEM; and retail (although a number of others were also mentioned).

Promoting equality and inclusion and meeting the needs of specific groups.

6.16. A further common perceived benefit of the use of Apprenticeship Levy funding to help unemployed people move into employment, and to help meet the workforce development needs of employers was that this would help to promote equality.

6.17. Some respondents focused on overall opportunities for improved equality and inclusion, and the development of a diverse workforce. Comments included that this use of Levy funding would: demonstrate a commitment to equality; promote fair work; provide opportunities for all (including people from disadvantaged backgrounds and under-represented groups); and address current inequalities.

6.18. Several respondents suggested that this would increase the opportunities available to specific groups and the largest number of comments focused on providing opportunities for those aged over 25.

6.19. Other groups mentioned were: women (including returners to the labour market); disabled people; those with health and social care needs; people from BME communities; care leavers; young people (particularly those not in education, employment or training); people in rural areas; and others experiencing poverty or disadvantage.

6.20. Comments were also made about addressing issues for people who have been unemployed for a long time or those facing redundancy. Also mentioned were: people in low paid or seasonal work; ex-service personnel; people who are self-employed; and people currently volunteering.

Meeting the needs of individuals

6.21. A further common theme was that this use of Levy funding would provide benefits to individuals. While some mentioned that it would have a general positive impact on individuals, more specific benefits to them were also cited.

6.22. These included that this would:

• Help individuals obtain specific and general skills.
• Increase employability and opportunities.
• Provide a pathway or bridge and enable them to access work and MAs.

6.23. It was also stated that this use of Levy funding would assist those requiring additional support to overcome barriers to employment. It was also seen to be a means of assisting people already in employment to sustain work, and to progress to higher levels, and move away from low wage or insecure employment.

Wider issues and the Scottish context

6.24. Several respondents made comments on benefits relating to wider issues and the Scottish context. Common issues raised were that this would have a positive impact on overall policy and the pattern of provision, and that it would benefit the wider economy.

6.25. It was suggested that this use of Levy funding would be consistent with the aims of the DYW strategy. It was also suggested that it would help to align resources and employability support, as well as to address issues relating to the reduction in, or loss of other funding for work with this client group ( e.g. European Social Fund [ ESF] funding; Employability Fund).

6.26. In terms of wider benefits to the Scottish economy, comments included that it is in the interests of Scotland to support increased employment opportunities, reduce unemployment and tackle skills gaps.

6.27. Other benefits were that this use of Levy funding would: address issues caused by a downturn in particular areas (industry, sector or geographical area); promote economic growth; and help attract inward investment. It was also suggested that it would help to: promote social mobility, reduce pressure on public services and address the "waste of talent" among some excluded groups.

Concerns about using Levy funding to help unemployed people move into employment, and to help meet employers' workforce development needs

6.28. Around a third of those who made additional comments raised concerns about using Levy funding to help unemployed people move into employment, and to help meet employers' workforce development needs. These were in three broad areas:

• Lack of need for this provision.
• Issues with the use of funding.
• Wider negative impacts.

Lack of need for this provision

6.29. A common theme among those who expressed concerns about this use of Levy funding was that there is a lack of need for this provision, with schemes and support already in place for this purpose. Some respondents provided particular examples of existing training programmes (including MAs) and other employability resources (including work by Jobcentre Plus) which they felt would address these needs.

6.30. A small number of respondents stated that this type of work would not meet employers' needs, nor enable them to recoup their Levy contribution. It was also suggested that there could be a risk of confusion between this and other forms of support. A few respondents expressed concerns about the quality of current employability support.

Issues with the use of funding

6.31. A closely related common theme was that, given the provision of existing funding for this purpose, this type of work should not be funded by the Apprenticeship Levy. Several respondents mentioned the existence of current sources of funding to support employability programmes and meet the needs of unemployed people.

6.32. Several respondents stated that this type of provision should be funded through other sources ( e.g. Department for Work and Pensions [ DWP]; and the Government). A few stated generally that funding should be allocated separately for this purpose.

6.33. Further comments included that the use of Levy funding to help unemployed people move into employment could: divert resources from other uses (including apprenticeships), replace existing funding; become a "catch-all" to fund all routes into employment and training; or spread resources "too thinly". Concern was also expressed about the potential for its administration to become complex, bureaucratic and onerous.

6.34. Several respondents stated that Levy funding should be used only to fund apprenticeships, or to "up-skill" those already in employment.

Wider negative impacts.

6.35. A number of comments were also made about possible wider negative impacts of using Levy funding to help unemployed people move into employment.

6.36. Among these, some respondents stated that this would represent a departure from the principles, or main purpose of the Levy funding (although some added that the actual type of work itself was valuable).

6.37. Additional comments included that this could undervalue work done by employers, or risk duplication with other services. A small number of respondents expressed the view that it could limit support for MAs and hinder the achievement of the proposed target of 30,000 by 2020.

Suggestions about developments to help unemployed people move into employment, and to help meet employers' workforce development needs

6.38. Around half of those who made additional comments at Question 5 made suggestions about developments to such provision.

6.39. The most common were about:

• The overall approach.
• Developments for specific groups.
• Other suggested developments.
• Funding issues.

The overall approach

6.40. Many respondents made comments about the overall approach to helping unemployed people move into employment and meeting employers' workforce development needs.

6.41. Among these, a very common theme was that such work should meet the needs of employers and the economy, by addressing skills needs and gaps (for employers and specific areas).

6.42. Related to this, several respondents stated that this work should involve a partnership with employers, with a need for their support for, and input to developments. It was also suggested that there should be involvement from, and links with, for example: DYW groups; Local Employability Partnerships; CJS employers; third sector organisations; education and training providers; and trades unions.

6.43. Additional comments made frequently included that there should be a robust and outcome-focused approach to this type of work ( e.g. that it should lead to qualifications, or progression to an MA or real and sustainable job opportunities / employment). A further suggestion was that it should be integrated with other, related provisions.

6.44. A small number of respondents stated that provision should be robust, flexible and focused on quality. Several stated that provision to this client group should not be at the expense of other provision.

Developments for specific groups

6.45. Several respondents stated that this work should focus on promoting equality, and that provision should be available to all. It was also suggested that there should be specific initiatives to target those facing barriers to employment ( e.g. equalities groups; those currently under-represented; furthest from the labour market; and at risk of exclusion).

6.46. A number of specific groups were identified which, in the view of some respondents, required a particular focus. These reflected the groups mentioned at paras 6.18-6.20. As such, the largest number of comments related to older people, with several respondents suggesting that these interventions should not only be available to young people, but to all ages (particularly those aged over 25).

6.47. A small number of respondents stated that eligibility for support should not be linked to unemployment. It was also suggested that funding should be available for those re-entering, as well as entering the labour market.

6.48. Comments were also made about the need for support to be available to all employers and to particular types of employers ( e.g. small employers and those in rural areas) and Levy payers.

Other suggested developments

6.49. A small number of respondents suggested other developments or requirements relating to this use of Levy funding. While some stressed the general importance of work to help unemployed people move into employment, one suggested that a working party could explore whether unused or forfeited training funds could be used in this way. Other specific suggestions included the need for:

• Clear criteria and parameters for use.
• Work to develop awareness of the provision.
• Support for employers to implement this work.

6.50. A few respondents mentioned the importance of having devolved employment services, and / or the potential to support the development of this with Levy funding.

Funding issues

6.51. Many suggestions were made about funding issues. Most focused on the types of work which should be funded and suggestions included, for example:

• Pre-employment, or pre-apprenticeship programmes.
• Transition.
• Workplace support.
• Up-skilling; and lifelong learning.

6.52. Other suggestions included funding for:

• Specific types of desired outcomes ( e.g. practical or sector-specific skills; and entry level skills / qualifications).
• Particular approaches ( e.g. work in remote or deprived areas or with particular groups; and flexible programmes).
• Costs for employers, or colleges.

6.53. A few respondents stated that this provision should be integrated with Government schemes and existing support to unemployed people. A few suggested expanding the ERI or Employability Fund, or that Levy funding could complement Access to Work.

6.54. Several respondents stated that involvement in this type of work should be on the basis of participant choice, and neither linked to payment of benefits or a "tick-box" exercise. Several expressed the view that Levy funding should not duplicate or replace existing sources of funding. A few suggested that it should directly benefit employers or be ring-fenced; or that it should be targeted at specific sectors or those with a "track record".

Other comments

6.55. A small number of additional comments were made. These focused on the consultation question and the impact of the Levy, and are discussed in Section 7.