It was confirmed on Friday 12th August that the apprenticeship levy will go ahead as planned in April 2017, despite a number a delays following the EU referendum result, and calls from business groups to postpone its implementation.
Robert Halfon, skills and apprenticeships minister commented on Friday, “Apprenticeships give young people, especially those from disadvantaged backgrounds, a ladder of opportunity. That’s why we continue to work tirelessly to deliver the skills our country needs. The apprenticeship levy is absolutely crucial to this.”
The apprenticeship levy is designed to create 3 million apprentices by 2020, and will be funded by businesses who have a payroll of more than £3million per annum contributing 0.5% of that wage bill into a digital account. This money can then be drawn from to fund the eligible training costs for them to hire an apprentice. It was announced on Friday that non levy paying employers will be required to pay 10% of the training costs for apprentices, with businesses who employ less than 50 staff having 100% of the costs covered by the government. It was also announced that there will be extra support for employers and training providers who take on 16-18 year old apprentices, young care leavers or those with special education needs, in the form of £2,000 per learner.
While the CBI welcome the government’s commitment to grow apprenticeships, the business group is calling for the launch date to be pushed back to allow proper planning and implementation, as well as further consultation with employers as to how the levy will work. One of their concerns is that the levy will only cover apprenticeships, meaning employers could rebadge other successful training programmes as apprenticeships to gain access to the funding. Another worry from CBI is that employers can only reclaim the cost of training the apprentice, and will not have other associated costs covered, such as recruitment and their wages. Their main fear is that the levy is putting quantity of apprenticeships over quality and could in fact jeopardise the apprenticeships brand.
A number of groups, including the Association of Employment and Learning Providers (AELP) and the Institute of Public Policy Research (IPPR), welcome the levy as a vital way to address skills shortages and believe keeping the date is vital for achieving the government target.
Other proposals announced on Friday include the plan to offer more flexibility for employers to re-train individuals in new skills, and to divide apprenticeships into 15 pay bands ranging from £1,500 to £27,000.
Employers and training providers have three weeks to respond to these announcements, closing on 5th September. Final details are then to be published in October, giving companies six months to plan ahead of the launch of the levy.
Aspire Training Team is an Outstanding Ofsted training provider of apprenticeships, and will be working with employers across the South over the coming months to prepare them for the introduction of the levy. If you have any queries about how the levy could impact your business, you can contact the team on 01202 551553 or email firstname.lastname@example.org.