Apprentice levy needs action now

Opito chief executive John McDonald
Opinion by John McDonaldChief executive, OPITO

The energy sector has historically shown strong commitment to employing apprentices.

You only have to look at the success of the industry’s Oil & Gas Technical Apprentice Programme (OGTAP) to see how actively engaged companies have been over the past 20 years since its inception.

Managed on behalf of the industry by OPITO and the ECITB, OGTAP boasts one of the highest apprenticeship achievement rates in the UK (over 95%) and with the backing of 17 oil and gas operators and major contractors, it has brought almost 2,000 trainees into the industry since 1998.

The introduction of the Apprenticeship Levy in April 2017 caused immediate and widespread concern across industry sectors. Investment stalled as businesses wrestled with the new criteria.

Figures released in September showed that the number of new apprenticeships in the UK (excluding Scotland) fell by 28% in the year to June 2018.

The energy sector continues to find the levy confusing and bureaucratic; failing both employers and apprentices alike. With two different regimes in Scotland and England to decipher, there are concerns on the complexity of drawing down funds and the lack of flexibility the spending criteria allows.

At the Conservative Party Conference in October, Philip Hammond acknowledged the concerns being expressed about the levy and that industry-wide engagement would take place.

This was followed with promises in the recent UK Budget for extra funding and reduced employer contribution rates in England.

While OPITO welcomes the acknowledgement that the levy isn’t working, action needs to be taken much quicker to listen to businesses across the UK and make changes.

As this article went to print, we have written and requested confirmation of when the engagement with businesses will commence.

We have also sent a letter to the Scottish Government to find out if it is willing to take action. We’ve asked for a thorough operational review of the levy and the associated

Flexible Workforce Development Fund in Scotland to assess if employers are indeed finding it easier to establish apprenticeships.

The overarching solution for the levy’s policymakers could lie in changing the reform’s remit, transforming it into a more flexible ‘skills’ or ‘training’ fund.

Agreed changes to spending criteria could provide much needed accessibility to funds. For example, having the option to draw down money over a longer time period than the current limit of two years, or being able to invest in diversifying the skills of existing personnel.

As the energy industry moves further into artificial intelligence, robotics and digitisation, the value in developing the current workforce must not be overlooked.

OPITO’s recent Workforce Dynamics Review found that if the sector achieves ambitions around the energy transition and oil and gas production and exports, around 40,000 people will need to be recruited into the sector over the next 20 years – and 10,000 of those will be in roles that don’t currently exist today.

We are developing a new skills strategy for the oil and gas workforce to ensure training requirements are in place to support the industry in line with the aims of Vision 2035. As posts and training requirements change over time, government policy must be aligned to ensure employers can take full advantage of all future opportunities.

Ultimately, we want government policy to support oil and gas companies investing in people who are keen to enter the industry, develop existing employee’s skills and support those who want to re-skill.