The Apprenticeship Levy

The Apprenticeship Levy

In the United Kingdom, the Apprenticeship Levy has been in place since 2017, and in the last five years, it has been utilized to help fund apprenticeships with a focus on quality and sustainability. The levy is applied at a rate of 0.5% of an employer’s pay bill, with each receiving an allowance of £15,000 to offset the cost. So far, it has been a great success and has helped many employers access high-quality training for their employees without having to break the bank.

However, the Levy isn’t perfect. There is still some confusion around it and its usage - which can be a bit of a minefield for employers. So, if you’re thinking of utilizing the Apprenticeship Levy for your business, there are a few things to consider before taking the plunge.

First and foremost, do your research! The rules surrounding the Levy can be complicated and change depending on your size and industry – so make sure you familiarize yourself with the latest regulations.

Why are the rules so complicated?

Well, the Apprenticeship Levy was designed to incentivise employers to invest in quality apprenticeships – so if you’re going to use it, you need to make sure that your apprenticeship meets certain criteria. For example, your apprenticeship must last for at least 12 months and provide substantial training of a ‘high-quality standard’.

The Levy has also been designed to encourage employers to think more strategically about their workforce and the skills they need in the future – so you’ll need to consider what roles you’ll be recruiting for and how apprenticeships can fill any potential gaps.

It’s important to remember that the Apprenticeship Levy is not just a way to get ‘free’ training. You still need to invest in the wages and resources needed to support your apprentices – so make sure you have the budget available. Don't fall into the trap of paying the minimum wage (the minimum apprenticeship wage is even lower) - you'll end up training future employees for somebody else !!

All in all, if used correctly, the Apprenticeship Levy can be a great way of investing in your workforce – and you can reap the rewards of a skilled and motivated team in the long run. So, don’t be put off by the complexity – it’s there for a reason! Do your research and make sure that you can get the most out of this great opportunity. I can help you - and will do it for free !!

How does Ofsted get involved in the Apprenticeship Levy?

Ofsted is responsible for inspecting and regulating apprenticeships to make sure that they are of high quality, meet national standards, and provide young people with the skills they need to succeed. Employers utilizing the Apprenticeship Levy should expect their training partner to be inspected by Ofsted and given a grade depending on how well their apprenticeship program meets the criteria set out by the government. These grades range from ‘outstanding’ to ‘inadequate’ and are used to provide training providers and employers with feedback on their apprenticeship program and how it can be improved. As such, Ofsted plays an important role in ensuring that the Apprenticeship Levy is being used effectively. Training providers and employer providers should strive for ‘outstanding’ ratings in order to get the most out of their Apprenticeship Levy.

Skill Gaps

It’s important to assess the skills gap in your business. Think about which areas need investment and how much you’ll need to spend on apprenticeships – then compare this against the Levy funds available for training. You may find that there are gaps between what you need, and what can be provided by the Levy – which will require you to look at other funding streams. There are tons available, you just need an expert to help you navigate them.

Business Strategy

Finally, make sure that your apprenticeship plan is in line with your overall business strategy. Apprenticeships can give you an invaluable injection of talent, but they need to be tailored to fit your needs and objectives. Consider what type of people you’re looking for, what qualifications and experience they should have, and how you can best integrate this injection of talent.

The Apprenticeship Levy can be a great way to boost your business and encourage young people into the workplace – as long as you do your research and plan accordingly. If you need any help or support then reach out to me at Andy@wawwa.io