The Apprenticeship Levy
In April 2017 the way the government funds apprenticeships in England is changing. The introduction of the Apprenticeship Levy will require some employers to contribute, and see others have their entire training costs covered. Take Stock spoke to Jill Whittaker, managing director of HIT Training, to see how the Levy will affect your business.
What is the Apprenticeship Levy?
In a move to fund three million apprenticeships by 2020 and encourage companies of all sizes to provide quality training to employees at all levels, the government has created the Apprenticeship Levy which, on 6 April will become a reality.
Who will pay it?
The Levy will affect organisations with an annual salary bill of £3 million or more (only around 2% of companies), who will pay 0.5% of their payroll amount into the levy. Monthly contributions will start through the PAYE system in April, so employers in this category need to make sure they’ve made provision for it.
Who won’t pay it?
Employers with an annual wage bill lower than £3 million will not pay the Levy but will, however, be required to pay 10% of any apprenticeship courses, with the government funding the remaining 90%. For those businesses with fewer than 50 employees and those who take on apprentices under the age of 19 (or those aged 19-24 who are care leavers or who have special educational needs) the government will cover their entire training costs.
How will it work?
Funding for apprenticeships, including where applicable top-ups from the government, will be accessed through the online portal Digital Apprenticeship Service (DAS). Through the DAS, all employers will be able to select an apprenticeship framework or standard, choose the training provider/s they want to deliver the training, select the assessment organisation they desire and post apprenticeship vacancies. The system will also be used to set the price agreed with a training provider and pay for apprenticeship training and assessments.
Why is it happening?
It presents a fantastic opportunity for companies to provide quality training to employees regardless of level, and sends a message to prospective staff that their development is being taken seriously. In a highly competitive job market it’s a chance for employers to source young talent and offer them a head start on the recruitment stage. There are higher-level apprenticeships available for management too, with the recent news that courses will be offered through to degree equivalent – with a £4.5m governmental investment.
What do you need to do?
Employers need to look at where skills gaps lie and whether a training programme would enable a new or existing employee to fill this. Operators should also examine current training schemes and consider whether they would be better served with apprenticeships that ensure they’re developing their workforce in the best possible way. They should then access the scheme through the DAS.
Why does the industry need apprenticeships?
Apprenticeships will help to attract new employees and talent into the sector, develop existing team members, provide a highly-skilled workforce for the future and will ultimately ensure that careers in hospitality and catering are viewed as a more attractive option. There is, in fact, little not to like about the new era of apprenticeship training we are about to enter.
For more information on HIT Training and the Apprenticeship Levy visit: hittraining.co.uk