Scrutiny for Levels 6 and 7 Accountancy

Daniel recently attended a seminar hosted by the British Computer Society (BCS). During the seminar, an interesting point was raised about an increased uptake in higher-level apprenticeships. So, our director decided to investigate a little deeper. What has this to do with Accountancy you might ask?

Well, the director concerned is our company expert in finance and accountancy recruitment. In this article, he will discuss his findings on apprenticeships in the context of accounting. However, it is worth noting that many of the points are applicable across multiple sectors. (Forward by Kelly Yeates)

At present, companies can use their apprenticeship levy funds to upskill their qualified accountants.

In real terms, this means that those who are already qualified would go onto a degree apprenticeship at level 6 or 7. These are nationally recognised as equivalent to bachelor’s and master’s degrees respectively.

According to AELP, many companies are using the levy to upskill their staff to levels 6 and 7. This sounds like a good thing. However, AELP suggests that an unintended consequence of the apprenticeship reforms has been that more companies are using the funds this way. Furthermore, future skills shortages could arise as a result.

This might sound alarming. However, looking at the February 2019 Statistical First Release (SFR), there is an overall increase in all higher-level apprenticeships.

Anything from level 4 is a higher-level apprenticeship.

The increase is significant; 48,150 level 4 + apprenticeships for 2017 – 2018. Compared with the 3,700 higher level starts of 2011 – 2012, this is an increase of 44,450 over a 7-year period.  10,880 (22.6 percent) of these starts were at levels 6 and 7.

In their AELP CEO Webinar 200319 ET, the leading authority, AELP also stated that this high uptake of higher-level apprenticeships was unexpected by the Department for Education. While there is no obvious causality in the marked increase of higher-level apprenticeships, AELP believes that the higher-level uptake is a factor in the halving of level 2 provision. It decreased by 38.1% in 2016-2017 and by 15.9% in 2017-2018.

AELP has also pointed out that this increase in higher-level apprenticeships will eat up a significant proportion of company levy pots. The result being that there will be little left for transferring to non-levy payers or for taking on new level 2 and 3 starters.

Whether the financial consideration is the direct causality of the level 2 and 3 decrease is, perhaps, questionable. However, given the figures, AELP’s suspicion that the decrease at levels 2 and 3 could lead to a future skills shortage seems valid.

There were similar sentiments at the seminar.

Some of the governing bodies are keen to reduce the number of higher-level apprenticeships. They hope that this will increase the number of trainee and junior staff.

Whether or not removing levy funding for levels 6 and 7 so soon is right, I am unsure. It could be argued that, by doing so, employers flexibility to fill existing skills shortages would be severely limited by such a move in the longer term.

I suspect that a number of companies will now rush to take up levels 6 and 7. I further suspect that this will be a direct result of AELP’s proposal to stop levy funding of these levels.

However, it should be clarified that all of this is still in the proposal stage. Therefore, for those with accountants currently undertaking levels 6 and 7, there is time. Furthermore, if the numbers are limited or the funding at this level replaced by loans or employer funding, I’m hopeful that there would be a transition period. This would allow those already on higher-level apprenticeships to complete them on the same terms with which they began.

For those companies who are upskilling their existing accountancy teams to levels 6 and 7

It might be worth looking at your own apprenticeship uptake and checking the numbers of apprentices you have at all levels. It may also be worth considering the number you need on a proportional basis and planning year on year.