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The Credit Services Association (CSA)
Blog: Seizing the initiative
David Sheridan, CSA Board Director
There has been a considerable amount of noise recently around the issue of Apprenticeships, and deservedly so. Something that was once the preserve of industries coaching young men and women to master a particular ‘trade’ or ‘craft’ has long since evolved into schemes that are more comprehensive and inclusive, and embracing the professions.
Certainly the Government has signalled its support and is fully committed to delivering no less than three million Apprenticeships in England by the start of 2020. It is an ambitious project, and one in which it is taking both the ‘carrot’ and the ‘stick’ approach to encouraging larger employers to get engaged.
One of the Government’s more recent targets has been the financial services sector, a sector in which we are heavily engaged as the representative body of the multi-billion pound credit services industry. The Chancellor George Osborne and his cohorts are seeking to persuade the larger firms within the FS space to recruit more Apprentices by following a strategy that could best be described as ‘reversed-incentivisation’. At the heart of this ‘reversed-incentivisation’ is the Apprenticeship Levy.
The Levy sneaked up on those in the FS community somewhat unannounced. Indeed even now there are some to whom the plan has still come as something of a surprise. The mechanics are simple: any firms that have a payroll in excess of £3 million will have an additional 0.5% tax ‘levied’ and set aside to invest in Apprenticeships. While the timeframes appear yet to be decided, there is certainly a case of ‘use it or lose it’, and the Government has been keen to stress that Levy payers will receive more from the Levy than they have actually put in. Put another way, the Government will ‘top up’ the Levy payments – perhaps by as much as 10% – to enable businesses to invest in more people.
While there may have been some surprise, there are few sectors better equipped or better placed for managing this new Apprenticeship drive than financial services, since they already have a series of Standards agreed for banking, insurance, pensions and mortgages etc. If we consider our own specific area of expertise, we similarly also already have a Credit and Collections scheme, which is being jointly spearheaded by the CSA and the Chartered Institute of Credit Management (CICM).
These Standards are employer-designed Apprenticeship programmes approved by the Department for Business Innovation and Skills (BIS). They are developed through the Trailblazer process by steering groups of employers and professional and trade bodies who ensure the Standards meet the needs of employers and will deliver the best results for the sector. With the final blessing of BIS, the Trailblazer is then approved. Take up thus far has been steady rather than spectacular, but as new Standards are approved for funding, and the schemes receive greater publicity, there is no doubt that employers will become more actively engaged and stand fully behind the initiative.
The Levy’s Impact
It is certainly the case that the credit and collections industry, in its desire to ensure that the industry has access to Apprenticeship Standards that are fit for purpose, is being well supported by BIS. The Department has already given approval for a Level 2 Credit Controller Standard and the go-ahead for the development of a second initiative, the Advanced Credit Control and Debt Collection Trailblazer Apprenticeship Standard, and the Compliance and Risk Professional Apprenticeship Standard. Our industry, and the financial services sector as a whole, is anticipated to make a significant contribution towards the £2.730 billion that the Government expects the Apprenticeship Levy will raise in its first year.
It would be naïve, however, to assume that everything is rosy in the garden. Some concerns have been expressed, not least around the additional burden such schemes may place on an already heavily-regulated industry like ours. There is considerable evidence, however, that high-quality Apprenticeship programmes add real value and provide long term benefits including reduced costs through improved staff retention, higher levels of employee engagement and more highly competent and skilled staff who will treat your customers well. In our industry, for example, through an employer-led Standard, we would envisage a credit controller or collector to have attained the required competence within 18 months, and have developed sufficient skills to enable successful Apprentices to work for employers of any size.