A former Premiership Rugby chief executive has called on the government to cut red tape and back sports clubs to use the existing Apprenticeship Levy to fuel upskilling opportunities for athletes and local communities.
David Ellis, who served as CEO of Harlequins for eight years until 2019, insists the compulsory tax could be better used to benefit local communities who rely on sports clubs.
The Apprenticeship Levy is a tax paid by UK firms with an annual wage bill of over £3m – which includes all Premier League and Premiership Rugby clubs. The rate totals 0.5 per cent of a company’s total wage bill, excluding an initial governmental allowance of £15,000.
“We all know the Nelson Mandela speech that states that sport has the power to change the world,” Ellis tells City AM. “Athletes themselves have some of the most powerful voices in the world.
“There’s a lot of red tape that makes it hard to use and spend the Apprenticeship Levy, and 55 per cent of the levy is never spent annually. Only four per cent of companies spend their total levy.
“So what you’ve got is a free pot of cash to do really good things with, and in this world you can empower people and empower local areas.”
Apprenticeship Levy consensus
The general consensus among business leaders is a desire for the government to expand the parameters in which the levy can be spent, thereby encouraging further use of the fund.
The then-shadow education secretary Bridget Phillipson, now a minister, said in June that Labour would allow for a higher percentage of the levy to be used for existing staff.
It is spent on apprenticeship hires and upskilling but Ellis states that the ability for sports clubs to use the levy internally creates a no-brainer approach to utilising access to cash that has already been paid into HMRC.
“We started going to Premier League football clubs because they’ve got enormous wage bills, which means they’ve got a bigger part of the levy,” adds Ellis, founder of sport advisory Maikai.
“We said to them that we can help them strategically and technically understand how to use the levy to help with the transition of athletes.
Lifelong learning
“Fifty per cent of the skills that we currently have in the active job roles will be changed over the next five years and one in four jobs will be fundamentally changed. So you’ve got this need to have lifelong learning, a need to adopt new skills.
“If the UK is going to be super competitive and grow and be a productive nation then it needs to really grasp this skills agenda in a joined-up way.
“We all know that change doesn’t happen unless it’s optimistic or we’re forced to do it. So what I’d love to see is Skills England [a new Labour upskilling creation] turn into a genuine delivery [unit].
“Sport has the power to do this. And then you could go down into schools and it becomes societal. It may sound a bit boring but if we could sort it then we’d create amazing amounts of opportunity.”