The Apprenticeship World is Changing – Are You Ready?
In two days’ time (6th April), the funding of Apprenticeships in the UK will radically change forever.
The Apprenticeship reforms will impact on employers of all sizes – with new incentives, a new funding system and changes to how the qualifications will be delivered and achieved.
Larger employers whose annual wage bill exceeds £3 million will start to pay a levy of 0.5% of their wage bill towards funding Apprenticeships, regardless of whether they already employ an apprentice or not. And small businesses with a wage bill less than £3 million will be expected to contribute 10% towards the cost of all apprenticeships if they choose to train and develop their workforce in this way.
Understanding the Levy
Each Levy organisation will have full control over how they spend the money they pay into the levy, which can be used to cover the cost of apprentice training and assessment from approved training providers. Organisations will have 24 months to spend the money before it is reallocated to other businesses.
Upskilling your Existing Workforce
The Levy is very much geared towards upskilling the existing workforce of all ages rather than just for the development of new recruits and young trainees. In addition, graduates are now eligible for apprenticeship training.
Higher Levels of Qualification
While ‘traditional’ Apprenticeships have historically been delivered at level 2 and 3, (GCSE and A Level equivalent) the new apprenticeship standards will provide much more scope to employers, enabling them to upskill their workforce up to Masters Level 7. Many of the new apprenticeship standards also incorporate professional qualifications such as CIPD, CIM, CIMA or ACCA. This is particularly attractive to organisations who are already paying commercially for these qualifications who will now be able to use their levy pot to pay for these ,
Getting Levy Ready
There are a number of things that levy paying organisations should be doing to prepare for 6th April 2017 when their first levy payment will be collected.
Set up a Levy Working Group
A good starting point is to engage a number of key personnel from within the business and create a ‘Working Levy Group’. The following decisions will need to be made: Who will be responsible for setting up and managing the new online digital account? Should the business take responsibility for uploading all the employee information and payment schedules onto the digital account or should this be outsourced to a training provider? Does the business have the capacity to do this internally or will additional staff need to be recruited? What are the training priorities and which are the most suitable apprenticeship standards or frameworks to use? When should delivery start? Should small pilot groups be set up? What is the best way to engage and educate staff so they understand about the changes?
Set up your Digital Account
Levy funds will be accessed through a new Digital Apprenticeship Service (DAS). You will need to register to create an account, and link to your PAYE systems – the funds will then appear in your digital account and accrue each month. Follow this link to register: https://www.gov.uk/guidance/manage-apprenticeship-funds
Report what you Owe to HMRC
The Levy will be paid to HMRC through PAYE, alongside tax and NICs. You will need to declare this to HMRC and include it as part of your usual PAYE payment.
And Finally…
The Levy and new Apprenticeship reforms will have a profound impact across many businesses and have the ability to significantly increase the quality of Apprenticeships to better meet the skills need of employers. If you have any questions at all about how to best leverage the Levy or any of the Apprenticeship Reforms, please call 0161 200 1673 or email Alison Bagnall at ab@theapprenticeacademy.co.uk.