The Government is being very active on the people front at the moment, bringing with it a mixed bag of opportunity, cost and additional reporting requirements for some.
The fact that the Government has a manifesto commitment to deliver three million new apprenticeships during this parliament is old news. Development in what constitutes an apprenticeship is new, as will be the 0.5% apprenticeship levy on larger firms. This starts in April next year with the ability for firms to reclaim up to 125% of the tax paid to fund apprenticeships in their organisation. On the reporting front a new requirement is coming for firms with more than 250 staff, to explicitly report information on pay and bonuses by gender.
From the start of the new tax year in 2017, members with a total staff pay bill of more than £3 million per annum will be charged a 0.5% Apprenticeship Levy by HMRC This is, in part, a move to encourage employers to offer apprenticeships and pay for them.
There have however, also been some significant changes to the criteria which are likely to make apprenticeships more attractive to employers. They don't now apply only to specific new staff between the ages of 18-24 on a ‘scheme’. Now, 12-month apprenticeships can apply to existing as well as new staff, and are blind to age. They cover roles such as Relationship Manager, Customer Service Adviser, Financial Services Administrator and Mortgage Adviser. More information on the financial services apprenticeship standards currently ready for delivery can be found here:
One of the primary criterion for an ‘apprentice’ is that in gaining the accredited qualification at the end of the apprenticeship they achieve some form of progression. Firms must also use recognised training bodies.
In addition, those who pay the levy will be able to reclaim up to 125% of what they have paid to help fund apprenticeships in their own organisation. The current view is that this reclaim will have to happen within two years of the levy payment being made on a use it or lose it basis.
Two key key areas remain unclear: – the plan for those firms which sit beneath the threshold to claim funds, which we are told is on the cards, and the approach to employees who are based outside England given that the other nations of the UK have devolved powers in this area.
The BSA is having conversations with the Head of Early Careers at Barclays who is the Financial Services representative on the Government’s Apprenticeship Delivery Board. Plus we are looking forward to meeting with BIS, the Government department responsible.
We are also keen to establish a sector group interested in apprenticeships specifically and talent development more generally so if this is you and you are interested please get in touch with firstname.lastname@example.org
The Gender Pay Gap
The power to make regulations requiring the publication of information on the pay of men and women has been in the gift of the Government since the Equality Act 2010. The last Government chose to handle this area through a voluntary initiative called Think, Act, Report. Whilst over 300 employers signed up to the initiative, only a handful chose to be transparent and give details of the pay gap between men and women in their workforce.
Now, “building on progress”, earlier this month the Rt Hon Nicky Morgan, MP for Loughborough and Secretary of State for Education, Women and Equalities, announced that the Government will now legislate to require employers with more than 250 staff members to publish certain pay statistics:
- mean and median overall gender pay gap figures across the firm.
- the bonus pay gender pay gap for bonus (not overtime) payments including the number of men and women that got a bonus.
- the number of men and women working across each salary quartile.
No granular breakdowns by grade and role will be required and firms can include commentary and explanation, including proposed actions alongside the numbers.
The objective is to add to existing achievements in tackling gender-based inequality. This new move is based on the view that unless employers are required to publish statistics which reveal whether they are paying women and men the same pay for the same roles, the barriers will stay up.
We have come a long way since Made in Dagenham, but as Nicky Morgan said when she spoke at the Deloitte Trailblazing Transparency event this month: “McKinsey estimates that the UK could add £0.6 trillion of additional annual GDP in 2025 by fully bridging the gender gap.”
Fortunately, this legislative change and the reporting requirements that it brings will not happen tomorrow.
The Government has just this month issued a second consultation and draft regulations, the consultation closes at 11:45 on 11 March. The new regulations are expected to come into force from 1 October this year with the 30 April next year the first pay data snapshot date. This data must be published by no later than 30 April 2018 and must be available on the employer’s website and uploaded to the Government annually.
One concern is that the Government will use the data to name and shame employers, a practice that the new Chief Executive of the CBI, Caroline Fairbairn has roundly criticised. What is your view?