What is the Apprenticeship Levy?
As of April 2017 ALL employers in the UK with a wage bill of more than £3 million per year now pay an Apprenticeship levy. This is calculated as 0.5% of their payroll and is paid each month.
The Apprenticeship Levy will raise £3 billion a year and will fund three million Apprenticeships by 2020. It underpins the government’s growth and reform programme to significantly increase the quantity and quality of Apprenticeships.
What does the Apprenticeship Levy mean for SMEs?
Employers in the UK with wage bills under £3 million will not be subject to the Apprenticeship Levy.
However there is now a new co-investment Apprenticeship scheme that has been introduced for SME’s. This means that smaller organisations will now make a 5% contribution towards the cost of Apprenticeship training and assessment.
The entire landscape is changing and alongside the Apprenticeship Levy, new standards and assessment methods are now being created by employer groups known as Trailblazers.
This means that new Apprenticeship standards are being developed up to Level 7, which is equivalent to a Masters degree. Many of them are being designed to incorporate professional qualifications, so they will be more relevant and highly regarded by employers and individuals undertaking them. The assessment methods will also be more robust in the new standards, harder to achieve and will be graded up to distinction level.
This is an exciting time for Apprenticeships and these radical changes will help to significantly raise the profile of Apprenticeships, develop the UK workforce, increase productivity and drive growth of the UK economy.
The Apprentice Academy has a dedicated team focused on helping organisations understand and plan for the changes to ensure they maximise the impact in the workplace. For more information please get in touch.