Apprenticeships are a cost effective way of helping your organisation grow. By training apprentices with the specific skills to meet organisational needs, you can improve productivity and profitability.
The Government introduced a levy for apprenticeships in April 2017. Alongside PAYE contributions, employers with wage bills of more than £3m will now have to pay 0.5% of their wage bill into an electronic account, regardless of whether or not they employ apprentices. The Government will use this to fund the cost of apprenticeship training and assessment.
For those employers with a wage bill of less than £3m, other changes have been introduced, including a requirement for some employers to contribute towards the cost of training and assessment.
New employer-designed apprenticeship standards are being introduced, which will describe the skills, knowledge and behaviours that an individual needs to be fully competent in an occupation. The government plans to replace the current Apprenticeship frameworks with Apprenticeship Standards by 2020. Apprenticeship Standards have been designed by groups of employers; each Standard will have an Independent End Point Assessment which must be completed and passed in order to complete and achieve the Apprenticeship.
The reforms will help to improve the quality of apprenticeships with English and maths at level 2 forming an essential part of the programme for those who haven’t already gained these qualifications. Apprenticeships have been given equal legal protection to degrees.
How the apprenticeship levy works
The Apprenticeship Levy was introduced in April 2017.
Employers in any sector with a pay bill of £3 million will be required to pay an apprenticeship Levy which will be charged at a rate of 0.5% of their annual pay bill, and will be paid to Her Majesty’s Revenue and Customs (HMRC) through the Pay as You Earn (PAYE) process. These employers will then be able to access funding for apprenticeships through a new digital apprenticeship service account.
Employers with a pay bill of less than £3 million are not eligible to pay the levy, and won’t need to use the digital apprenticeship service (DAS) until at least 2018.
These employers will be asked to make a 10% contribution to the cost of apprenticeship training to their training provider and the government will pay the remaining 90%.
Employers with fewer than 50 people working for them will be able to train 16 to 18 year old apprentices without making a contribution towards the cost of training and assessment, as the government will pay 100% of the training costs for these individuals.
For both employers and providers, there will be a £1,000 payment for recruiting a 16-18 year old on an apprenticeship framework or standard, as well as for 19-24 year olds who were formerly in care or who have an Education and Health Care plan. This will be paid to employers in two equal instalments at 3 months and 12 months. Initially, these payments will be made to employers via their training provider.
There is a register of Apprenticeship Training Providers and only providers who are on this government register will be able to deliver apprenticeships. Employers select their provider and agree the terms of the apprenticeship programme to include how it will be delivered, its duration and fees.
The employer will also determine who they would like to complete the End Point Assessment (from a selection of registered organisations).
As the largest provider of apprenticeships in Wirral across a wide range of industry and service sectors, Wirral Met College can support and guide you through the apprenticeship reforms and levy process.