“Our goal is for young people to see apprenticeships as a high quality and prestigious path to successful careers, and for these opportunities to be available across all sectors of the economy, in all parts of the country and at all levels.
“Nobody understands the skills employers need better than the employers themselves. That is why we are placing them in the driving seat. They are designing apprenticeships so that they focus on exactly the skills, knowledge and behaviours that are required of the workforce of the future. A levy will put employers at the heart of paying for and choosing apprenticeship training, and place the funding of apprenticeships on a sustainable footing,”
The government’s 2020 vision for apprenticeships to reach 3 million starts has resulted in a complete shake up of the existing frameworks and funding.
The employer levy plays a significant part in the apprenticeship reforms, which includes a whole new suite of Apprenticeship Standards that are being developed by groups of employers across every industry and sector called Trailblazers and a new funding system, to support the success of these new standards.
The levy starts in April 2017 and the new apprenticeship funding system begins in May 2017.
The employer apprenticeship levy will replace taxpayer funding of apprenticeships. It starts in April 2017 and applies to all UK employers with an annual pay bill of £3million or more for employees who live in England (less than 2% of UK employers).
The money goes in to a digital account for your company and you also receive a 10% monthly top-up from the government.
Month 1 calculation example
You have an annual pay bill of £5 million.
You can expect to owe £5,000,000 x 0.5% = £25,000 p/a £2,083.33 pcm
Your monthly allowance of £1,250 is then offset:£2,083.33 – £1,250 = £833.33
You owe £833.33
Your account is topped up by 10% from the government: £833.33 x 10% = £83.33
Your digital account for month 1 stands at £916.66
If you do not pay the levy, you will not have a digital account for your apprenticeship training.
Whether you are a levy payer or not, you are in complete control of the apprenticeships you offer and can choose the provider you want to deliver the training and assessment, this means you can negotiate on the price of delivery and ensure that the quality of training and level of service you receive is right for you and your apprentice.
The levy supports the English apprenticeship system. Scotland, Wales and Northern Ireland have their own arrangements for supporting employers to access apprenticeships.
Look out for our next article on buying apprenticeship training and assessment and if you have any specific queries or concerns about the new Trailblazers and the apprenticeship levy, contact Simone Fonseca, Education and Training Manager on 020 3141 7350 or email firstname.lastname@example.org