It has been confirmed by Skills Minster, Nick Boles, this week that the apprenticeship levy is still due to be implemented in April 2017 despite the EU referendum result, but with approximately only 2% of employers being eligible to pay into the levy, how will the other 98% of employers access apprenticeship financial support?
Currently, employers of all sizes pay a third of their training costs, with the Skills Funding Agency providing the remaining two thirds; put simply for every one pound invested by the employer, the SFA provides two pounds. Under proposals announced in June, this supporting fund could be increased for any employer not using the funds available from the apprenticeship levy. There may be a number of reasons why they are not accessing this; their wage bill may be too small to pay into it (only employers with a wage bill over £3million will be required to pay into the levy), or their pot has run out.
The proposals suggested that the SFA could be contributing up to 90% of the funding in the future for employers not paying into the levy. Employers would be required to contribute the remaining 10% of the funds prior to the SFA contribution.
Mark Dawe from Association of Employment and Learning Providers (AELP) has welcomed the proposal, stating that small and medium sized businesses need all the support they can get moving forward from the introduction of the apprenticeship levy next year. The funds from the apprenticeship levy can only be used towards the actual training of the apprentice, and does not cover any of the associated costs such as recruitment or wages. Having to find less funds for the training itself will be a welcome relief to smaller employers, who may find hiring an apprentice more appealing. Those towns and cities where there are no levy paying employers at all will see a huge benefit in being able to offer apprenticeship opportunities to the young people in their area.
As these proposals were announced prior to the EU referendum last week, we are still waiting for further confirmation of the plans; something that will hopefully be done prior to the Summer break on the 15th July.
If you have any questions about hiring an apprentice or regarding the apprenticeship levy, you can contact the Aspire Training Team on 01202 551553 or email firstname.lastname@example.org