The government has changed the way apprenticeships are funded in order to improve the quality and quantity of apprenticeships in England. The apprenticeship Levy came into effect on April 6th 2017.
It will be 0.5% of a company payroll, paid by all employers with a payroll in excess of £3million per annum. You can call us to discuss how this will affect your business and the best ways you can plan for these changes on 0800 783 2545.
Your levy payment will then be ring-fenced in the form of electronic vouchers. Employers use this voucher to purchase apprenticeship training and assessment from approved providers and organisations, from May 2017 onwards.
Levy funds (vouchers) will be accessed and managed via a new online portal called the Digital apprenticeship Service (DAS).
All un-used vouchers will expire after 18 months.
“The Government estimates that 2% of UK employers, approximately 22,000 organisations, will be required to pay the apprenticeship levy.”
Based on current Skills Funding Agency (SFA) funding rules, the levy can be claimed back and spent on apprenticeship training for all employees at all levels and ages.
The levy can also be used to fund existing employee development as long as they meet the current SFA funding criteria.
It is estimated 3-5% of an employer’s workforce will need to be an apprentice to fully utilise the levy.
Where employers require more funds for their apprenticeship programmes than their digital account enables, the government will support and help employers meet 90% of these additional costs. Employers will be asked to make an additional 10% contribution paid directly to the government or chosen provider.
Apprenticeships are a devolved policy. This means that authorities in each of the UK nations manage their own apprenticeship programmes, including how funding is spent on apprenticeship training. The DAS will support the English apprenticeship system. To calculate how much you will have to spend through the English system, the government plans to use data they already hold about the home address of your employees. This data will be used to calculate what proportion of your pay bill is paid to employees living in England. This assessment will be made in early 2017.
Taking on an apprentice is a proven and cost effective way for employers to grow and sustain their business; develop talent and prevent skills gaps. Here are just some of the measured benefits of apprenticeships:
Apprenticeship Wages
All apprentices in the 1st year of their apprenticeship must be paid at least the national minimum apprenticeship wage, which is currently £3.70 per hour.
Apprentices aged 19 or over, who have completed the 1st year of their apprenticeship, are entitled to the minimum wage applicable to their age. This is currently £5.90 for 18 – 20 year-olds and £7.38 for anyone aged 21 – 24 and £7.83 for 25’s and over. However, many employers choose to pay their apprentices significantly more.
Apprenticeship Funding
The way apprenticeships are funded has changed, with the introduction of the apprenticeship Levy. If you have any question about this, or to discuss your individual business requirements, you can call us today on 0800 783 2545.
Apprenticeships are a great way to recruit for the future and build a talent pool tailored to the specific needs of your business. Once an apprentice has successfully completed their apprenticeship many employers welcome the opportunity to retain them within their business.
An investment in the future, successful apprentices can progress on to other levels of apprenticeship, increasing their knowledge, skill sets and investment in your business. As an apprenticeship training provider we are very much involved in the progression of our learners and will welcome the opportunity to discuss all the options with you and your apprentice.
Yes. You must offer apprentices the same conditions as other employees working at similar grades or in similar roles. This includes holiday, sick pay and any benefits you offer other members of staff such as childcare voucher schemes.
We can help you find the right apprentice for your business. If you are looking to employ an apprentice you can learn more about the process on our Employing an apprentice page, or you can call us to discuss your requirements on 0800 783 2545.
Employers can only spend their levy funds on apprenticeship training delivered by an approved training provider. This could be through buying in training from an approved provider or delivering the training themselves.
To deliver training, all providers and employers looking to deliver their own training, need to register as an approved provider and be subject to Skills Funding Agency (SFA) quality arrangements and Ofsted inspection.
Levied employers can now choose a provider from the Register of apprenticeship Training Providers (RoATP).
Paragon Skills is an approved DAS training provider. As experts in the field of apprenticeships, with over 19 years’ experience, we can also help identify the right apprenticeship training programmes for your staff and work with you to recruit a suitable candidate using our own recruitment service.
Employers who wish to train more apprentices than their levy funds will support, will be required to pay just 10% of the apprenticeship training costs for those additional apprentices. The remaining 90% of the costs will be paid for by the government.
All employers in England who pay the levy and are committed to apprenticeship training will benefit from a 10% apprenticeship fund ‘top-up’. This will be applied monthly to funds entering their online Digital apprenticeship Service (DAS) account for apprenticeship training in England from May 2017. This means that for every £1 entering the levy payer’s account it will be increased to £1.10 in value.
Annual levy payment: £24,000
Monthly account payment: £2,000
10% Top Up (10% x £2,000) = £200
TOTAL MONTHLY LEVY ACCOUNT: £2,200
ANNUAL LEVY FUND: £2,200 x 12 = £26,400
Please note: Levy payments are calculated on gross annual payroll for all employees in UK. However, the ‘top up’ is calculated on the number of employees resident in England only.
A new body, The Institute for apprenticeships, will oversee the levy and the new apprenticeship standards. It will provide guidance on the use of the levy funding and lead the development of the standards. The Institute is due to be operational from April 2017.
The levy will not affect the way employers fund training for apprentices who started their training before 1 May 2017. The funding for these apprentices will continue under the terms and conditions that were in place at the time the apprenticeship started.
Yes. An apprenticeship is a great way to upskill current employees without disruption to your business.
Plus, supporting a current employee through an apprenticeship is a great way to boost staff morale, as well as encouraging loyalty. It is a clear indicator to employees that you care about their training, development and career progression.
At Paragon Skills we can advise you on available funding for this, possible grants from the Government and the next steps should you want to explore the benefits of apprenticeships more.
In the sectors we work in, an apprenticeship takes 12 to 48 months, however this can vary depending on the hours worked, the industry sector and level of qualification.
Most of the apprenticeships we offer are 100% on-the-job training with no requirement to train offsite. The exception being our apprenticeships in the Automotive and marine sectors where time each week will be at our skills centres. This can be either a day release or block release depending on your requirements.
Apprentices usually work for at least 30 paid hours a week and must work more than 16.
There are a number of employment rights all workers have when they start a job, but young workers – those under 18 years old – usually have a few additional or different rights to protect them at work.
Download the new Acas guide Employing younger workers [378kb] to help employers manage and support apprentices and young workers. The guide has advice for employers on how to help young workers and apprentices with the transition from education to the world of work.
Your designated Personal Trainer will visit you before your apprentice starts, to complete a health and safety check. Once your apprentice has started on their apprenticeship, your PT will pre-arrange convenient dates and times for these teaching, learning and assessment visits with your apprentice with you beforehand. You can visit our Employing an apprentice page to find out more about this process and how we will support you.
Yes. However, the more training providers you work with, the more time you will need to invest in the management of each relationship. Our advice would be to find one training provider that can manage your apprenticeship programmes including multiple suppliers. This way your management time is minimised, but the impact of your training programme is maximised and the training offered meets the needs of all employees involved in the apprenticeship programme.
The cost of an apprenticeship varies and is dependent on the level and Standard or Framework. To find out which Standards or Frameworks best meet your business needs, and the cost of these, speak to your training provider.
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