An authority in UK training has openly criticised what he calls an ‘outrageous abuse of the training levy system’ by universities. Many are using a loophole to run so called ‘MBA apprenticeships’, in his view, contrary to the spirit of the apprenticeship scheme and the intended use of the levy when it was introduced last year.
“We understand that a large number of universities - possibly as many as 50 - intend to register on the government’s register of approved apprenticeship training providers in order to tap into the more than 1,400 people expected to enrol for these so called MBA apprenticeships over the next year or so,” said Jon Graham CEO of JTL (pictured).
“MBA apprenticeships clearly do not meet any sensible definition of apprenticeships as we know it, and we’re pretty sure that using Training Levy money for these MBA apprenticeships was never envisaged by the government or anyone involved with setting up the Training Levy at the time. Some companies – and we understand some government departments – are using these MBA apprenticeships to train employed people who already have degrees. It’s frankly ludicrous to dip into this fund that was clearly intended to provide career paths for young people looking to learn a profession through the apprenticeship route. Currently, this activity only looks to be responsible for around 1% of the Training Levy funds, but it’s clearly the thin end of the wedge. If the government is willing to turn a blind eye to what amounts to a clear abuse of the system, we have to question what other uses the Training Levy will be used for in the months ahead.”
The training levy was introduced by the government with companies with a wage bill in excess of £3m a year paying a 0.5% levy to be spent on apprenticeships and the closing of skills gaps across the UK. The use of the Levy to fund the MBA apprenticeships has been criticised by many in politics, education and business but has been supported by the Chartered Management Institute and the Department for Education who claim this is simply part of the on-going programme of apprenticeship reforms.
Payments are collected monthly by HM Revenue and Customs (HMRC) through Pay as You Earn (PAYE), alongside tax and National Insurance.
Levy funds can be spent on training for existing staff or new recruits providing the training meets an approved standard and the individual apprentice meets the eligibility requirements.