Simplifying the Apprenticeship Levy

In April 2017 the Government made a significant change to the way Apprenticeship funding works through the introduction of the Apprenticeship Levy. The purpose of the Levy, which applies to large employers across all sectors, is to gain more commitment from businesses to increase the number of apprentice starts – 3 million by 2020. The Apprenticeship Levy also aims to give employers more control over purchasing decisions.

Applying for the Apprenticeship Levy is relatively straight forward. Here’s what you need to do:

Establish if the Apprenticeship Levy applies to you?

If your wage bill is over £3 million per annum then the Apprenticeship Levy is applicable to you.

Paying the Levy is simple as it’s paid monthly through your organisation’s normal PAYE scheme. Providing you are not connected to another Company or Charity you will receive an allowance of up to £15k to offset against your Levy payment.

More information on how to calculate payments can be found here.

Understand the business benefits of Apprenticeships

A report from Ofsted previously highlighted that although the Government’s renewed efforts to boost Apprenticeships was commendable; it wasn’t sufficiently focused on implementing initiatives that benefited either employers or the economy.

Following a recent Ofsted report which highlighted that although the Government’s renewed efforts to boost Apprenticeships was commendable, insufficient focus was being given to implementing initiatives that benefit either the employer or the economy. As such, new reforms have been introduced to directly benefit those organisations committed to employing apprentices. This includes the removal of the need to pay National Insurance contributions for apprentices under the age of 25.

Many organisations are also seeing apprenticeships as a possible solution to the much debated skills shortage facing the UK. In fact, a recent report by Alexander Mann Solutions highlighted that this was the opinion of 37% of managers surveyed; believing that apprentices would be a top source of talent going forward.

Other organisations that have grasped the benefits of the Levy are using it to develop the skills of their current workforce, using it to offer degree-level or higher professional apprenticeships to their existing employees.

The Apprenticeship Levy has the potential to revolutionise the future workforce, giving employers greater ownership and control of apprenticeship programmes to help enhance skills, as well as creating training opportunities that better suit the diverse needs of all young people.

So now that you’ve established you’re a Levy paying Employer what do you need to do?

You will need to create an account with the Digital Apprenticeship Service (DAS) to access Levy funds, manage your apprentices and pay your Training Provider. DAS enables you to have complete control; allowing you to add new apprentices and make any necessary changes. For  information on how to do this click here

We’d also recommend engaging with a Training Provider as early as possible to ensure your Apprenticeship Programme delivers correct training for your apprentices, and importantly, delivers the desired results for your organisation.

Are you aware of the roles that the Education and Skills Funding Agency and Ofsted play?

The Education and Skills Funding Agency (ESFA) acts as an executive agency of the Government in its operational management of the apprenticeship funding system, including the Apprenticeship Service. It also delivers a number of operational functions such as the contracting and audit of Training Providers and the management of the Register of Apprenticeship Training Providers and Register of Apprentice Assessment Organisations.

When people hear the word Ofsted they often relate this to school inspections. However, apprenticeship programmes are subject to OFSTED inspections too and their remit covers: the quality of any apprenticeship training provision from Level 2 to Level 5, providing support and challenge, or carrying out monitoring visits to Providers who have triggered concern. They will also inspect the quality of Apprenticeship Training provision at Level 6 and/or 7 where this involves teacher and trainer training.

At a time when many organisations are struggling to find skilled employees, apprenticeships and the Apprenticeship Levy really does offer a commercially beneficial way to develop a skilled pipeline of talent that understands the organisation and is committed to helping it deliver its organisational objectives. It’s really not complicated and the benefits are significant.

If you want to find out more or discuss how to make the most of your Apprenticeship Levy contact our Education, Skills and Learning team at apprentice@gigroup.com

Information taken from:

http://www.freshbusinessthinking.com/how-the-apprenticeship-levy-can-benefit-businesses/

https://www.gov.uk/guidance/pay-apprenticeship-levy