The Apprenticeship Levy: October 2016 update

22/11/2016 - 23:00
Following the government’s latest announcement on the Apprenticeship Levy, which will be implemented in less than six months’ time, Jill Whittaker, managing director or HIT Training, summarises the new information.

“In August this year, the implementation of an Apprenticeship Levy was confirmed for April 2017. Last month, the government released further information concerning changes to the original outline.

“The report holds a lot of detail, which can seem a little overwhelming and hard to digest, so we’ve highlighted the key points that have been confirmed or altered, which operators will need to be aware of:

Levy payers (companies with a pay bill over £3m) will pay 0.5% of their payroll on a monthly basis. It is now confirmed that the Government will also top up the funds by 10%. 

The first Levy payment for employers will be in May. These funds will be used to purchase training through a new, digital system.

Levy funds will now remain available in employer’s accounts for 24 months, instead of the 18 months previously proposed.

If Levy-paying employers use up their digital funds but wish to invest more in apprenticeships, they will be asked to contribute 10% of the training fees.

The £1,000 employer supplement for recruiting younger apprentices aged between 16 and 18 will now be paid in two instalments, at the three-month and 12-month marks.

Each apprenticeship framework will now have a maximum funding band – there will be 15 different bands from £1,500 up to £27,000. Employers can negotiate pricing with their training provider. If an employer has their own training department, they may be able to make the Levy go further by offsetting some of their own training input.

Non-Levy paying businesses (those with a pay bill of less than £3m) will make a contribution of 10% towards their training fees, the government will pay the remaining 90%.

The government will cover 100% of fees for functional skills training for both Levy and non-Levy paying businesses.

“The implementation of the Apprenticeship Levy is fast approaching and as we draw ever closer, we welcome the clarity of detail from the government. We already know that the Levy will completely alter the way that apprenticeships are perceived and administered, as it will allow employers more influence and flexibility over the qualifications that they offer. And, of course, there is a broader business gain in that sourcing the right youth talent at the onset gives a head start on the recruitment stage in what is increasingly, a highly competitive jobs market. 

“With this new announcement we now know that there will be more time for employers to use their funds. Thanks to this alteration, employers can ensure the right programs are developed to alter the outdated perceptions of the sector and demonstrate the innovation, passion and opportunity for lifelong careers that it offers.  This is a chance to recruit new talent and / or up-skill existing employees, creating a career pathway that can compete for the very best candidates.

“The time to futureproof the Industry is now and apprenticeships have a vital role to play in this.”

For more information on the Apprenticeship Levy and advice on how to prepare, please visit https://hittraining.co.uk/apprenticeship-levy or call HIT Training on 0800 093 5892. 

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