Public Sector

1
The Apprenticeship
Levy Study:
Public Sector
February 2017
Research conducted by trendence UK

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Contents
Introduction
Introduction 3
Report context and overview 4
Employer profile 6
How will the public sector use the levy? 8
Will graduate recruitment decrease? 10
Is there any sign of a shift to high-level apprenticeships? 12
Who will have responsibility for apprenticeships? 14
On what terms will apprentices be employed? 18
How is the sector dealing with the apprenticeship brand? 20
When it comes to the Apprenticeship Levy,
public sector employers operate under unique
constraints. It is after all a government initiative
and the organisations they work for are funded
directly by government, and the government has
determined that 2.3% of its workforce at local
and national level should start an apprenticeship
programme each year. Moreover, this government
and its predecessor put severe limitations on
public sector recruitment.
These at times conflicting constraints have
consequences for the sector’s apprenticeship
programmes. On the one hand there is the urgency
of fulfilling the government’s 2.3% target, which
equates to 200,000 employees by 2020, as well
as unprecedented access to funds for training
that may not have been available in the past. On
the other hand, there is the imperative to limit
and even reduce headcount, which means public
sector employers have fewer options when it
comes to spending the levy than employers in
other sectors.
Inevitably, this means that the vast majority of
employers will have to look to existing staff to fulfil
the government’s quota, and correspondingly fewer
will be in a position to launch large-scale initiatives
aimed at new recruits. The terms on which
apprentices will be employed, too, will necessarily
reflect the demands and priorities of government.
There are other factors to take into
consideration: many employees in the public
sector are in older demographics, so it’s not
surprising that our survey finds many employers
are interested in apprenticeship programmes
for this age group. Part-time working is not
uncommon, which will have consequences for
the time available for training.
Nevertheless, it’s also clear from our survey that
public sector employers are enthusiastic for
the Apprenticeship Levy and the opportunities
it offers. The levy will allow them to configure
training strategically and on a far bigger scale
than they could previously. They can plan for the
long-term and offer high level apprenticeships in
particular in ways they could not before.
The diverse nature of the public sector workforce
presents some unique challenges – and not all
training providers will be able manage them. BPP
has been working with employers for 40 years.
We have in-depth knowledge of apprenticeships at
all levels – from Foundation to Degree and Masters
– and across all disciplines – HR, IT, finance,
administration, legal and many more. Moreover,
we are experienced in designing bespoke
programmes that are flexible and meet the
learning requirements of the apprentice, regardless
of age. Whatever the needs of the public sector
employer, I am confident we can meet them.
Ben Lambert
Strategic Talent and Development Consultant
BPP Professional Education

4 5
Report context
and overview
Earlier this month we published a survey of 100
top employers and asked them how they aimed
to deal with the Apprenticeship Levy. Were they
going to use the levy or lose it, for instance, how
did they think it would affect their talent pipeline,
what were their recruitment strategies? Their
responses were illuminating.
Since then, we have been asked by recruiters
to provide a breakdown of responses by sector.
This survey is an analysis of the public sector’s
approach to the levy. It does not claim to be a
weighted survey of the entire sector. But it is a
snapshot of how some of the biggest employers
are tackling the opportunities and challenges
prompted by its introduction.
The findings highlight how public sector
employers, at central and local government
level, plan to handle the levy and implement
apprenticeships. It also contrasts how the sector’s
response varies in some respects from employers
elsewhere. For instance:
• All public sector employers plan to use the
Apprenticeship Levy to train existing staff, the
highest proportion in any sector
• A quarter are facing an annual levy in excess of
£8 million
• Seven in ten will use the levy to train the 50+
age group, the highest number of any employer
• Diversity and social mobility are important
objectives for many employers
• The levy will allow many public sector employers
to expand their programmes significantly to
include high level apprenticeships
• Most employers are enthusiastic about the
apprenticeship brand and eager to promote it
Public sector employers operate under
different constraints to those in the private
sector. They have to meet the government’s
target of converting 2.3% of the workforce to
apprenticeships and their headcount has been
curtailed. These twin constraints inevitably colour
their approach to apprenticeships, which in any
case is bound to change once the levy matures
and the full implications for their organisations
become clearer.
However, we hope that the findings in this
survey will provide an insight into what
the sector is thinking now, how it hopes to
overcome any challenges and how it plans to
maximise any opportunities.
Methodology
Levy Key Facts
Research: conducted by trendence UK
• The levy starts on 6 April 2017
Sample: 100 top employers
• Employers will pay 0.5% of their wage bill (above £3 million)
(from the Guardian UK 300)
towards the levy
Sectors: 12
• Public sector employers must enrol a minimum of 2.3% of
Method: online questionnaire
their staff on apprenticeships
Period: December 2016 to January 2017
Authors: David Palmer and Andreea Galin
(trendence UK) and Emma O’Dell (BPP)
• They have 24 months in which to reclaim it on
approved apprenticeships
• Apprenticeships must last for at least 12 months
• All apprentices must receive 20% off the job training
• The training must be new and relevant to the job

6 7
Not all employers paying the levy plan to reclaim the tax through the
deployment of apprenticeships. Will you use at least some of it or lose it?
Employer profile
Lose it
13%
• The majority of public sector employers (88%)
are planning to use the levy but the proportion
saying they won’t use it is the largest in all
sectors bar retail.
• All employers who won’t use the levy say it is
because they have no appropriate positions
for apprentices.
• Well over three-fifths of public sector employers
(63%) will pay an annual levy of over £1million,
which is close to the all-sector average (64%).
• A quarter of employers (25%) are facing a levy of
more than £8 million, with the same proportion
paying between £500,000 and £1 million.
• When asked personally if they were in favour
of the levy more than three-fifths of recruiters
(63%) professed no opinion, the highest
percentage in any sector. A quarter said they
were (25%) and a few were not (13%). In our
general survey, 43% of recruiters were in favour,
29% were against and 28% had on opinion.
Analysis: Public sector employers find themselves
in a slightly different environment to their private
sector peers. The push to expand apprenticeships is
a government policy, which they are responsible for
implementing, and ministers have set them a target
of ensuring that at least 2.3% of their workforce must
be on apprenticeships, which corresponds to a figure
of 200,000 apprentices by 2020. It isn’t yet clear,
however, what penalties employers would face if they
do not reach the target.
Use it 87%
Approximately how much will the Apprenticeship Levy cost your company?
£8million+
£5-8million 0%
£3-5million 0%
£1-3million
25%
38%
£500k-£1 million
25%
£250k-£500k
0%
Less than £250k
13%
Are you personally in favour of the levy?
Yes 25%
No opinion
63%
No 12%

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How will employers
use the levy?
Year-on-year predicted levy usage 75%-100%
50%
• All recruiters in the public sector (100%) see the
levy as an opportunity to earmark funds to train
existing staff and only half (50%) cited bringing
in new talent. The percentages in the general
survey were 75% and 74% respectively.
• All public sector employers (100%) cited
maximising L&D spend and supporting
workforce planning as important reasons for
capitalising on the levy – the highest across
all-sectors. However, social mobility and CSR
objectives were mentioned as key objectives for
a third (33%).
• Well over half of public sector employers are
targeting 16-18 and 19-25 year olds (57%
for each group), slightly above the all-sector
averages (47% and 55% respectively). But an
even larger proportion (71%) are aiming for
apprentices in the 50+ age group, almost double
the all-sector average of 37%.
• Only half of employers in the public sector (50%)
are planning to recoup most of the levy within
four years compared to three-fifths (60%) of all
employers. A third (33%) think they will manage
to use most of it in the allotted 24 months, which
is near the all-sector average (32%).
Analysis: Employers in the public sector are operating
under two conflicting constraints: on the one hand
they have a government target to convert 2.3% of
their workforce to apprenticeships, on the other they
are in most cases unable to increase headcount,
indeed many have had to cut the number of staff.
That inevitably means they will look to enlist a lot
of existing staff on apprenticeships, and as many of
them are older, it’s not surprising that seven in ten are
looking at programmes for the 50s.
0%
Year 1
Diversity initiative
CSR initiative - support local communities/supply
chain partners to develop talent
33% 33%
Year 2 Year 3 Year 4
Reasons to capitalise on the levy?
17%
33%
Professionalising and training existing workforce
Maximising L&D spend
Support workforce planning
100%
100%
100%
Talent development initiative
50%
Lateral recruitment initiative
17%
Social mobility initiative
33%
Government youth unemployment initiative
17%

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Will graduate
recruitment
decrease?
• Half of public sector employers (50%) say they
are planning to cut the number of graduates
as a result of apprenticeships but they are only
planning slight reductions.
• Although no employer is planning drastic cuts,
none is ruling out any change either. Half (50%)
have yet to decide on a strategy.
• Two-fifths of employers (40%) say they
will convert graduate into apprenticeship
programmes. Three-fifths (60%) say they will
do the same for sponsored degrees, the highest
proportion in any sector.
Analysis: To meet the government’s target, public
sector employers will have to be flexible, which means
they will have to evaluate all existing programmes,
including graduate-level ones, to see if they can
convert them into apprenticeships. One possible
obstacle could be the number of part-time roles, which
are common in the public sector but which could put
time constraints on programmes.
Are you planning to reduce the number of
graduates you recruit?
Will you convert any of your current talent programme to apprenticeships?
Work experience programme
0%
School leaver programme
0%
Not sure
50%
Sponsored degree programme
60%
Yes, drastically
0%
Yes,
slightly 50%
No 0%
Graduate programme
Management and Leadership programme
40%
40%
No
20%

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Disciplines
Is there any sign of
a shift to high-level
apprenticeships?
Actuarial 0%
Accounting and Tax 71%
Financial Services 29%
Management and Business 86%
Digital and Technology
HR
71%
71%
Legal
14%
Engineering 0%
• Public sector employers are planning to offer a
wide range of apprenticeships. A large majority
(86%) is planning to offer high level 5, 6 and
7 apprenticeships that do not involve a degree
and many will offer Degree Apprenticeships,
too (71%).
• Most, however, are also planning to offer
Foundation Level 2 apprenticeships (86%)
and a significant proportion will provide
Traineeships (29%).
• Public sector employers are planning to offer
most apprenticeships in management and
business (86%), technology (71%), accounting
(71%), HR (71%), financial services (29%), and
legal (14%).
• Over a quarter of public sector employers (28%)
will cap the number of programmes they offer
between 1 and 6. But over two-fifths (43%) will
offer seven or more, which is almost double the
all-sector average (44%, 22%).
Analysis: Traditionally, many public sector
employers only used foundation-level apprenticeship
programmes and, understandably, price was a big
determining factor. Now they have levy to spend
and a target to reach. So inevitably they are eager
to expand programmes at all levels, and high level
apprenticeships could be a big beneficiary.
Do you intend to cap the number of programmes you offer?
Not sure 29%
10+ programmes
29%
7-9 programmes
14%
4-6 programmes
14%
1-3 programmes
14%
Apprenticeship type
Degree apprenticeships 71%
Higher (level 5/6/7 non degree apprenticeships)
86%
Advanced (level 4 apprenticeships)
86%
Intermediate (level 3 apprenticeships)
71%
Foundation (level 2 apprenticeships)
86%
Traineeships
29%

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Who will be responsible for training your new apprentices?
Who will have
responsibility for
apprenticeships?
A training provider who can deliver all of
your apprenticeship needs
29%
Multiple specialist training providers 43%
Appoint a lead provider with the ability
to manage subcontractors
Enlist the support of your organisational
wide Managed Service Provider
0%
0%
Become an employer training
provider yourself 14%
• Over two-fifths (43%) will opt for multiple
external training providers, and 29% are looking
for a single provider, both figures are close to the
all-sector averages (44% and 34% respectively).
A few public sector employers (14%) are
planning to train apprentices internally.
• Most public sector employers (71%) say
an apprenticeship team will manage their
programmes, one of the highest in any sector;
the all-sector average is 33%. Well over half
nominate L&D (57%), with 14% saying HR and
the same amount the business as a whole.
Responsibility for managing apprentices
Graduate /Early Career 0%
HR 14%
• Of those who will opt for external training providers,
the most important considerations are the ability
to furnish a broad range of apprenticeships and
bespoke offerings (83% each), end-to-end
consultation (67%), industry experience (67%),
and a strong client portfolio (33%).
• A third (33%) say their apprenticeship
programme is driven at top executive level. Most
cite L&D (67%) and a levy project team with
representatives from around the business (50%).
• Two-fifths of employers (43%) say that finance
will manage the Digital Apprenticeship Service
(DAS) with 29% saying it will be HR.
Analysis: The diverse nature of public sector
employment and the broad range of roles inevitably
means responsibility for apprentices is equally diverse.
However, the unique obstacles public sector employers
face present a challenge to external providers, and not
all will be equipped to deal flexibly and sensitively with
such a diverse workforce.
Talent
Apprenticeship specific team
The business
0%
L&D 57%
14%
71%
• A majority of public sector employers (71%)
will manage apprentice recruitment in house.
A significant minority (29%) plans to rely on a
mixture of outsourcing and in-house strategies.
Who internally will be responsible for managing your online Digital
Apprenticeship Service (DAS) account and resulting levy cash flow?
Other
29%
Business 0%
HR function
28%
Finance function 43%

16 17
Services provided by a training providers
How will you attract and recruit apprentices year on year?
End to end consultation 67%
Broad range of Apprenticeship Standards 83%
Manage attraction and recruitment in house
Complementary offerings (e.g.
PQ/degrees)
17%
29%
Use an outsourced recruitment provider
Source a training provider who has a
recruitment offering
Ability to bespoke 83%
71%
Mix
National coverage (including devolved nations)
17%
Variety of delivery modes 0%
Industry experience 67%
Strong client portfolio 33%

18 19
What type of contract will your apprentices be offered?
On what terms
will apprentices
be employed?
Bespoke apprenticeship contract 0%
Contract for the role 0%
Permanent contract 14%
Fixed term for the duration of
the programme
86%
Retain existing contract (where
existing staff become apprentices) 100%
How are you planning to compensate apprentices?
• Well over two-fifths of public sector employers
(43%) will pay apprentices the higher living
wage and none plans to pay them the minimum
wage. Most (71%) will pay apprentices a salary
that reflects the programme they are in, with a
significant minority (29%) paying them a wage
that reflects the business line they join.
• The overwhelming majority of employers (86%)
will put apprentices on fixed-term contracts for
the duration of the programme, double the allsector
average (43%), with only a few offering
permanent contracts (14%) which is half the allsector
average (28%). All employers in the public
sector (100%) plan to retain existing staff on their
existing contracts if they become apprentices.
• Half of employers (50%) will place apprentices
into direct vacancies and for over two-thirds
(67%) it will be a mix of new or existing FTE.
• Most public sector employers (71%) will recruit
apprentices through a bespoke process, well
above the all-sector average (54%). Over twofifths
will use lateral hires (43%) and none plans
to use graduate or school-leaver assessments,
which is the joint lowest along with retail.
Analysis: Apprenticeship compensation and contracts
in the public sector are a reflection of the headcount
constraints that both local and central government
have been operating under for some years. Those
limitations will usually be the biggest determinants
of the apprenticeship offering rather than other
strategic considerations.
Bonus at the end of the programme only
National minimum wage
Annual performance based bonus
Salary increase at end of programme only
Annual salary increase whilst on programme
Salary reflective of business line they are...
Salary reflective of level of programme
Location specific salary
National salary
0%
0%
0%
0%
14%
14%
14%
29%
71%
Going rate for the role they are carrying out
14%
Living wage
43%
How will you recruit/select apprentices?
Bespoke apprenticeships assessment process 71%
Early Career (Graduate or School Leaver
assessment process)
0%
Lateral hire assessment process 43%

20 21
Is the
apprenticeship
brand a problem?
Do you think that the ‘apprenticeship brand’ will affect your employee
value proposition when using it for graduates and internal staff?
Yes
57%
No
43%
• More than half of public sector employers
(57%) say the brand will affect their employee
proposition with over two-fifths (43%) saying
it won’t. The all-sector averages are 65% and
35% respectively.
• Despite that, three-quarters (75%) aim to
openly use the apprenticeship brand, the highest
proportion in any sector and more than twice the
all-sector proportion (36%). No public sector
employer plans to avoid using the term, though a
quarter will rename the programme internally.
• All of employers (100%) say the prospect of
improved retention and reduced attrition would
be a significant ROI.
Analysis: Although the public sector recognises that
historically there were some negative perceptions of
the apprenticeship brand, the majority of employers
are very positive about the programme and eager
to get behind it. The fact that apprenticeships enjoy
broad political support at local and central levels of
government can only help.
Do you see this as a challenge at your organisation?
• Over two-fifths of respondents in the public
sector (43%) say the requirement to provide
apprentices with 20% off-the-job training is a
challenge, though most are unsure (57%).
• All employers in the public sector (100%) say
staggering study time so all apprentices are not
off the job at the same time would mitigate any
challenge. Over two-thirds (67%) cite gaining
management buy-in and the same proportion
building in relevant, standardised internal training
as mitigating factors.
Not sure
57%
Yes
43%
No 0%

BPP Professional Education is one of Europe’s leading specialist
providers of professional education and delivers a range of
industry-leading professional qualifications, professional
apprenticeships, professional development programmes and
learning media.
We enjoy a trusted advisor status for many of our clients and
institutes and offer professionals opportunities to progress
through a variety of qualifications in actuarial, accountancy
and tax, banking and finance, business, law, management and
leadership, HR and technology.
If you have been tasked with considering your businesses’
strategy for apprenticeships, or advice is needed on the
operationalisation of your programmes across the full
apprenticeship lifecycle, then we can help. We can support you
by reviewing your whole business talent strategy (graduates,
apprentices and internal talent/development schemes) with a
view to designing new, interconnected propositions.
Contact us on:
03300 291 737
corporate@bpp.com
employers.bpp.com
For more information about apprenticeships, follow us on
Twitter @BPPProfApps or like us on Facebook:
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For more information about trendence UK Research, contact:
David Palmer, UK Research Manager trendence UK
Email: David.Palmer@trendence.com
Call: +44 (0)20 7061 1911
Web: www.trendence.com/en
©BPP University Limited 2017
©BPP Professional Education Limited 2017 03651