As the dust settles on the Chancellor’s Autumn Statement and further detail on the Apprenticeship Levy is announced, now is a good time to review what we know and what it means for businesses.
The Apprenticeship Levy will come in to force in April 2017 and businesses with a wage bill of more than £3m will pay a levy of 0.5 per cent of their payroll, to help fund apprenticeships across the UK.
For example, if an employer has an annual wage bill between £1 and £2.9m they will receive a £15,000 allowance per year – totalling £15,000 in the levy pot.
If an employer has a £4m pay bill they will receive a £15,000 allowance per year and also pay a 0.5 per cent of the £1m, equalling £5,000 – totalling £20,000 in the levy pot.
There’s still some detail to come about how this system will work in practice – but what is evident already is that this levy will help bridge the functional skills gap that currently exists.
The levy goes hand in hand with the government’s apprentice Trailblazer scheme which I have been involved in – a programme driven by employers which aims to improve apprenticeship standards and their relevance to employer’s needs.
The apprenticeships of the future will support apprentices not just to get the skills and knowledge they need to carry out their job, whether it be in the facilities management sector, security, healthcare or retail, but also the pastoral support they need to develop and adapt to working life.
But, for that to work employers need the right internal infrastructure to support apprentices, they need to buy into these programmes and plan effectively for them.
April 2017 isn’t that far away and plans for apprentices within business need thought and planning so that an apprenticeship strategy is in place, and employers are prepared rather than playing catch up.
Apprenticeship programmes come in all shapes and sizes, many start out small – but there’s no harm in starting now or running a pilot to make sure the best plan is in place. It’s also worth remembering that apprenticeships can be used to give existing members of the team who change role the new skills and knowledge they require.
My advice to employers for now is to discuss this internally, seek advice from a training provider and consider what other resources you might need to deliver an apprenticeship.
Further detail on the practicalities of how and when the funds will be handled are expected to be announced in the coming months.