The Apprenticeship Levy has landed; what next?

6 April 2017
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Today, the Apprenticeship Levy will come into effect for large employers across the UK, Gloucestershire College, the county’s leading provider of apprenticeships, continues to help businesses levy paying an non levy paying understand these changes, how they will affect them and make the journey as smooth as possible for them; ultimately improving their workforce for the future.

The top-line changes which will affect businesses include:

Levy payers

  • From this month, businesses with an annual wage bill of more than £3 million will pay a 0.5% apprenticeship levy.
  • This money, plus a 10% top-up from the government, will be added to their Online Apprenticeship Service (OAS) account and be available as digital vouchers from late May 2017.
  • They will pay for apprenticeship training and assessments via the OAS from May 2017 – this can be spent on apprenticeship training for new apprentices and to upskill existing staff.
  • Once the digital vouchers have been spent, businesses can still take on extra apprentices and the government will fund 90% of the cost of the apprentice, the business pays the remaiing 10%

Non-levy payers

  • Businesses with an annual waqe bill of less than £3 million won’t have to pay the levy.
  • Instead the government will pay 90% of any apprenticeship training costs, and the business will contribute just 10%.
  • The business will receive a £1,000 payment for recruiting 16-18 year old apprentices.
  • If the business employs less than 50 staff and they recruit an apprentice aged 16-18, the training is fully funded.
  • They also won’t have to pay National Insurance contributions for apprentices under 25.

While the College has been a driving force for apprenticeships locally for almost a decade, apprenticeships are more important than ever in the future of the UK economy, especially in three years’ time when post-Brexit Britain needs to upskill workforces across all sectors. The figures speak for themselves: currently the budget for apprenticeships is £1.5 billion but the levy will provide an additional billion pounds by 2020.

Changing outdated perceptions of apprenticeships is something the College has strived to do in more recent years, and thanks to the introduction of the levy, many employers who previously only offered graduate programmes are now seeing apprenticeships as the solution to skills gaps at higher levels, and plan to recruit high level and degree apprentices instead.

Great news for both employers and training providers like Gloucestershire College. However, there’s still work to be done to ensure the success and longevity of apprenticeships.

Perceptions still need to change

Young people are still not getting up-to-date careers advice from schools, and unfortunately many teachers and parents are still pushing the traditional A Level and university route as the only way to gain a successful career.

Some look down upon apprenticeships and many don’t even realise you can train for an apprenticeship in everything from accountancy to law, engineering to cyber security. But thanks to new legislation, schools must now give equal airtime to apprenticeship providers and colleges, to provide a full and balanced careers advice programme.

Apprentices need apprenticeships

Training providers like the Colleges, local businesses and the government need to ensure that every young person who wants to do an apprenticeship can do the one they want. The new reforms didn’t necessarily support this, as many small businesses were at risk of not being able to access funding for young people.

However this should be rectified and the Association of Employment and Learning Providers (AELP) has called for a minimum government budget of £1bn for non-levy payers to guarantee apprenticeship delivery for SMEs, regardless of the levy.

Frameworks are changing

In addition to funding reforms, the way apprenticeships are created, delivered and tested are also changing; with traditional frameworks being replaced by new apprenticeship standards and an end point assessment.

This means that it may now be possible for an apprentice to complete their apprenticeship without gaining a qualification, and with just one test at the end. However, the College believes that skills and competency need to be assessed throughout an apprenticeship, and a nationally recognised qualification awarded at the end, to protect the quality of its apprenticeships, which is why it has a dedicated team of Training Coordinators and Assessors at the GC Business Hub who support apprentices and their training providers every step of the way.

Peter White, Vice Principal at Gloucestershire College, said: “The success of our recent Apprenticeship Information Evening – when over 1,000 people attended to see 32 local businesses – demonstrates just how important apprenticeships are to the local economy.

“Gloucestershire College is proud of its long tradition of delivering successful apprenticeships – at this time of change we are working across the county within many sectors, advising employers; guiding people to choose the right path for them; delivering high quality learning that works; and supporting our partners and apprentices every step of the way.

“The GC Business Hub is happy to help businesses on their journey through the apprenticeship reforms and levy in any way it can and we look forward to seeing just how these changes will benefit both the businesses and our apprentices in the future.”

For more information visit www.gloscol.ac.uk/levy or call the GC Business Hub on 01452 563403.

Why Gloucestershire College?

We have a lot of experience offering Apprenticeships and work-related training. We have industry-standard facilities and experienced teaching staff which provide the ideal complement to work-based learning.

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