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Apprenticeships:

Grow your business - grow your people

When most people hear the term apprenticeship, they typically think of learning a trade such as carpentry or engineering.  These apprenticeships still exist of course but the number of sectors offering apprenticeships has grown hugely and with diverse roles including costume design; environmental conservation; social media and digital marketing and event management.

Apprenticeships are a viable and attractive route for increasing numbers of younger workers, older adults and employers.

Apprenticeships – what are the benefits for employers?

There are many benefits to apprenticeships, but essentially they provide:

  • A method for employers to close their skills gaps
  • More effective ways to attract enthusiastic new talent with fresh ideas
  • A way to place training where it is most needed in the workforce
  • Training tailored to specific job roles, making it right for your business
  • A way to upskill your workforce for the future
  • Help to reduce staff turnover and improve employee satisfaction
  • Improved productivity and a more competitive and successful business
  • Support people aged 16+ to get experience of the workplace

Levels of apprenticeships explained

There are currently 100 higher and degree apprenticeships available, with more to come, including foundation degrees, HNDs and full honours degrees.

Name Level Equivalent educational level

Intermediate

2 5 GCSE passes at grades A* to C or 4-9 with the new GCSE grading
Advanced 3 2 A Level passes
Higher 4,5,6,7 Foundation degree or above
Degree 6,7 Bachelor's or Master's degree

New apprenticeship standards

The new standards will explain what an apprentice will be doing and the skills and knowledge an individual requires to enable them to be fully capable of doing their job. The apprenticeships currently available include an approved assessment plan and are ready for employers and training organisations to use now. Numerous occupations have standards currently in development.

The Apprenticeship Levy

Apprenticeships are a hot topic thanks to the Government target of three million apprenticeships to start in England by 2020.

To ensure this target is reached, the apprenticeship levy has been introduced to encourage employers to increase their uptake of apprentices.  The levy takes effect 6th April 2017.

The Apprenticeship Levy - who does it affect?

The levy will affect employers operating in the UK, whether you pay the levy or not. It can also affect employees of all ages, whether they have just left school to start an apprenticeship or they are currently working and thinking of upskilling their knowledge.

Employers with a pay bill below £3m will pay a 10% contribution toward the cost of an apprentice, and the government pays the remaining 90%.

For small companies with fewer than 50 staff, the Government pays 100% of the training costs for apprentices aged 16-18 years old, or 19-24 for young people with an education and health care plan.

Key Facts

  • Employers in any sector with a staff pay bill of over £3m will pay the levy
  • The levy is 0.5% of the total annual staff pay bill, minus a £15,000 allowance, and is paid through PAYE
  • Funds from the levy will be accessed via a new apprenticeship service on a monthly basis
  • The Government will make a 10% top up payment to the funds for each company contributing. The 10% payment will be applied at the same time the funds enter the apprenticeship service account
  • Employers can sign up to the new service now. The first time they will see funds in their digital accounts will be late May 2017, a month after their first payment in April 2017
  • Funds can be used to pay for apprenticeship training and end point assessments. They will not cover salaries or travel costs.

How to estimate your level of apprenticeship funding

To find out if your organisation will pay the apprenticeship levy, how much your organisation will have available to spend on apprenticeships and how much the government will contribute towards the cost of training, click here

Employers: How to Calculate the Levy 

The levy allowance is worth £15,000 for each tax year meaning the levy is only payable on pay bills over £3m (0.5% x £3m=£15,000). With the 10% top up payment, for every £1 that enters a digital account to spend in England on apprenticeship training, they get £1.10.

What if a company’s pay bill is under £3m?

Employers with a pay bill below £3m will have to pay towards the cost of an apprenticeship. These firms will pay a 10% contribution and the government will pay the remaining 90% .For small companies with less than 50 staff, the Government will pay 100% of the training costs for apprentices aged 16-18 years old, and 19-24 with an education and health care plan.

Source: Government Levy 101 guide

Our advisers can work with you to:

  • Explain the benefits of the new levy and how the changes will affect your business
  • Support employers who are actively seeking to recruit for apprentices
  • Help identify skills gaps and highlight where apprenticeship programmes can help fill those gaps
  • Support employers to register their interest in apprenticeships

If you would like to find out more please get in touch: info@adviza.org.uk

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