The ‘Apprenticeship Levy’ The Opportunities for your Organisation
What is the Opportunity?
The Government is committed to achieving three million Apprenticeship starts by summer 2020. Employers are moving to centre stage to help drive these ambitious targets. For young people, apprenticeships are now seen as a recognised standard of development as they give a professional and rounded development of individuals of all ages while learning on the job. For mature staff, apprenticeships are recognised as a rigorous development route for new roles and skills. Approximately ó of the apprenticeships in the UK are for under 19’s, ó are for 19+ up to any age! Apprenticeships are thus a key element of organisational talent management strategy to build all other development around.
How will it Work?
From April 2017, employers with an annual wage bill over £3m will contribute 0.5% of their wage bill to HMRC through PAYE, less an annual allowance of £15,000. This will be topped up by a further 10% by Government to create a dedicated investment fund for each employer to spend on Apprenticeships. For example, with a wage will of £15m, your annual contribution would be 0.5% x £20,000,000 – £15,000 = £60,000, collected by PAYE at £5,000 per month. This would be topped up by £6,000 to £66,000 by the government. Each years allocation must be spend in the next 18 months (use or lose). You have to pay the levy whether or not you undertake any training of your workforce, so it is best to start thinking now.
How do I spend my fund?
Every employer will be set up with a Digital Account where they can see their current balance and what spending they have undertaken. Once an employer has agreed a Training Programme with a provider, the money will be paid direct to the provider on a phased basis. There are additional incentive payments to you as the employer if you are an SME, employ an apprentice under 19 years old and for successful qualification completion, offsetting some of the money you have invested in your digital fund.
What could I spend my fund on?
Examples might be a development programme for your team leaders or managers, a programme aimed at achieving improved customer service, developing new young talent into your organisation, introducing continuous improvement skills; the key point is to set your staff development strategy, then see how the levy process can help you.
What should I do now?
We can help you plan for the future by modelling your situation and acting as your development partner. We can undertake a full organisational needs analysis in partnership with you, at no cost to you. It is never too early to start and even prior to April 2017, we can access generous funding options to start any development programmes. We want to help you to put in place a robust plan, ready for the levy.