Emma Shipstone, expert lead on apprenticeship reform at Intraining
With the new tax year looming, the introduction of the Apprenticeship Levy is just around the corner. Gerwyn House, the skills director for one of country’s leading training providers, Intraining, and the organisation's expert lead on apprenticeship reform Emma Shipstone offer their thoughts on the apprenticeship reforms ahead…
The government are committed to creating three million apprenticeships by 2020 and see the introduction of the levy and new apprenticeship standards as a way to achieving that by putting employers in the driving seat of apprenticeship funding and design.
The way in which apprenticeships are funded from May 2017 is changing with almost all employers contributing something towards the cost of apprenticeships. This is dependent on the size and age of apprenticeship;
The apprenticeship levy will be paid by employers who have a pay bill in excess of £3m (which is approximately 2 per cent of UK employers). They will pay 0.5 per cent of their payroll through their PAYE system to HMRC. As with many systems each employer paying the levy will have an allowance of £15,000 to offset against their levy payments.
Developing and growing employers with a payroll of £2.8m will also be expected to register on the basis that HMRC expects employers to grow, and that during the tax year of 2017/18 they may well reach the £3m threshold.
The money paid through this levy will then be deposited into the Digital Apprenticeship System (DAS) which the employer will then be able to use to pay for any apprenticeship training.
Apprenticeship standards and frameworks have all been re-categorised into 15 funding bands. Employers will be able to negotiate the price they want to pay for the apprenticeships provision taking into account what training they offer in-house and any qualifications they may want included as part of the apprenticeship.
There is a 10 per cent top up that government will deposit into levy paying employers accounts. So however much you have to pay, the government will put in an extra 10 per cent each month.
For large public sector bodies there has been a recent consultation on a new duty for the public sector to have 2.3 per cent of its workforce comprised of apprenticeships. Each organisation, as well as paying the levy, will now have to aim for this target and report back to government its progress and intentions if it is not meeting the target.
One of the biggest facts about the apprenticeship levy that many are still unaware of is that you can use it to train your existing staff members if they require teaching and learning for up-skilling or retaining. You don’t always need to recruit new apprentices. However, recruiting a 16-18 year old could get you an incentive to help develop and support them if that is part of your recruitment and HR plans.
There is much we still don’t know about how the levy will be adopted by the devolved nations. The apprenticeship levy is only applicable at present to England, so despite employers paying the levy for all employees (even those that don’t live in England), the money deposited into the DAS will only be applicable for employees who live in England.
There are already lots of stories on social media platforms about the “Race to the Bottom”, where employers are negotiating prices with training providers to be as cheap as possible. If you are reading this as an employer, ask yourself what you want for your money? What are you prepared to pay for the best training for your staff? What does improved productivity, efficiency and bottom line look like? What level of quality would you compromise for a cheaper deal? What training and support can you add to the apprenticeship programme? Consider all of this when discussing and agreeing the price for an apprentice’s training.
The apprenticeship levy provides an opportunity to train and develop new and existing staff and when selecting new standards you are ensuring that your employees have the job competencies they need – the knowledge, skills and behaviours needed to perform that job role effectively.
The introduction of the levy provides employers with a chance to review their learning and development budgets, how they are spent, how graduate programmes are built and delivered, especially with the introduction of higher and degree apprenticeships.
The 10 per cent top up from government provides the opportunity to get more out than you put in, make the most of that fund, or lose it and another employer could well benefit from the levy that you have paid.
Intraining and Rathbone Training are both part of NCG, one of the UK’s leading education and training providers which aims to support its customers to unlock their potential through learning. Both organisations have a team of trained Employer Solutions and Corporate Account staff to help employers understand how to maximise their levy, improve their business bottom line and staff productivity. The team will work with you to review all your organisation training needs, staff development opportunities, succession plan requirements and work out the best way to deliver and achieve that - contact them for further information on 0330 123 1300 or firstname.lastname@example.org
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