By Sasha, Feb 5 2016 12:10PM
You have probably heard about the apprenticeship levy as it is the slightly controversial part of the governments’ vision to create 3 million apprenticeships by 2020.
The levy means that any business that pays over £3million through payroll per annum will need to pay 0.5% of this total amount to the government. The levy is due to be introduced in April 2017 and the money will be used to fund apprenticeship training across the UK. It is expected that the money raised by this will create an additional £3billion to put towards apprentice training by 2020 and that £2.5billion of this will be spent on apprenticeships in England.
All employers with a payroll bill over £3million will need to pay this levy but companies can claim back some or all of the money that they contribute so long as they spend it on approved apprentice training. This pot of money will also be made available to smaller employers who will not be paying into the levy and they are able to claim up to £15k per annum. The rules are quite specific and state the the money is only available to be spent on training apprentices on an approved apprenticeship standard (the full list of approved standards can be seen here) and cannot be used for subsidiary reasons such as internal training or apprenticeship salaries. This will hopefully encourage more businesses to take on apprentices whilst ensuring the the training being delivered is at a high standard.
It may surprise you to learn that, even though the benefits of apprenticeship programmes are obvious, many of the large employers who will need to pay into the levy do not have apprentice programmes in place...yet! I think that you will see this change between now and 2017 and I for one am hoping to help business in in this situation to a) claw back some of their money and b) realise the incredible benefits that an apprentice can bring to their business. An apprenticeship is not solely a ‘school leaver programme’ as they can be used to train staff of all ages and, crucially, can be used for the training of existing staff within an organisation. With programmes ranging from level 2 to level 6 (and even talk of Masters level 7 programmes) there are so many ways that businesses can train their staff through this route!
There are still some details to be clarified by the government and some questions to be answered (such as exactly how and when the payments will be taken and how employers will actually draw down the money from the government in practice) and so you can expect to see more talk about this in the papers until the levy is introduced in April 2017!