The Apprenticeship Levy explained

How the apprenticeship levy will work for your business and how you can get prepared - we discuss the latest news
9 February 2017

The apprenticeship levy, it seems, through conversations with employers and other training providers, is still causing considerable confusion. We are often being asked questions about apprenticeships in general and what the reform means for employers across the UK. So here, we’ll try to explain a bit more and tell you about the latest updates.

You can also download our simple guide here.

What’s the background?

  • Government target of 3 million apprenticeships

The Government has a target of 3 million apprenticeships available by the start of 2020. As a result, apprenticeships are in the process of undergoing a significant transformation - known as the apprenticeship reforms.

  • Employer-led system

The rationale behind the reforms is to create an employer-led system which aims to improve apprenticeship quality, simplify apprenticeship frameworks and create apprenticeships which respond to employer needs.

  • Trailblazers

The Trailblazer system has been set up to create this employer-led system and give employers greater control over frameworks. Trailblazer groups and made up of groups of employers who are able to design detailed a    apprenticeship standards within their sectors.

The rationale behind the reforms is to create an employer-led system which aims to improve apprenticeship quality.

What is the apprenticeship levy?

To fund apprenticeships going forward, the apprenticeship levy is being implemented from April 2017. 

The apprenticeship levy is a charge for employers who have annual salary bills in excess of £3 million, so less than 2% of UK employers will pay it. 

This charge will be calculated at 0.5% of an employer’s payroll and the money raised will be ring-fenced to pay for apprenticeships.

Find out more about what happens once your levy is calculated here.

What’s the latest apprenticeship news?

Technical consultation on Apprenticeship LevyOn 14th December, the HMRC launched a technical consultation on draft apprenticeship levy regulations which include the calculation, reporting, payment and recovery of the levy. Central YMCA responded to the consultation and await further announcements.

Institute for Apprenticeships announces Board MembersThe Government has announced eight board members for the Institute for Apprenticeships. Board members include business, LEP and college representatives but fall short of appointing a board member to represent independent training providers. YMCA Training has written to Peter Lauener, CEO of the IfA, to highlight the good work the charity and independent sector  do and have called for better representation.

Digital Apprenticeship Service (DAS) to go live in FebruaryThe new Digital Apprenticeship service (DAS), which lets levy-payers access their accounts and make payments online, has been cleared for use according to the Department for Education.

It is believed that levy-payers will be able to use DAS to choose the types of apprenticeships they want to run, the number of apprentices they take on, and appropriate training providers. 

Concerns raised about the Levy

Following a visit to YMCA Training Doncaster, Dame Rosie Winterton MP attended a session in the Commons to raise concerns surrounding the apprenticeship reform programme.

Rosie said: “It is really important that we ensure that training providers, like YMCA Training, are given the support they need, particularly in terms of investment in skills training, as apprenticeships play a vital role in enhancing life chances of working class kids and improving social mobility.”

Rosie Winterton MP took concerns discussed during her visit surrounding funding for smaller, non-levy paying employers and the transitional funding arrangements. Ms Winterton has now written to the Secretary of State on YMCA Training’s behalf and is currently awaiting a response.

It is really important that we ensure that training providers, like YMCA Training, are given the support they need, particularly in terms of investment in skills training, as apprenticeships play a vital role in enhancing life chances of working class kids and improving social mobility.
Dame Rosie Winterton MP

Need more information? Come to one of our roadshow events

On Monday 6th March, we are holding our annual Apprenticeship Awards Ceremony in the House of Commons with speakers including MP David Lammy Rosi Prescott. We will also be launching our Apprenticeship Roadshow.

The Roadshow will help businesses, providers and others understand theopportunities and challenges which face them. The event will be in the form of a panel discussion, where a variety of speakers will explore the new world of apprenticeships, including the opportunities and challenges.

The event will also include refreshments and networking opportunities.

Join us and get your questions answered. The Roadshow is taking place on the following dates:

Tuesday 21st March, 1-4pm, Manchester (Central Venue TBC)

Tuesday 23rd March, 1-4pm, Kings Cross, London

Tuesday 28th March, 1-4pm, Library of Birmingham

Tuesday 4th April, 1-4pm, Hintlesham Hall, Ipswich

Thursday 6th April, 1-4pm, Jubilee Library, Brighton

 

At Central YMCA we can help your business with any questions around apprenticeships, including understanding your levy and sourcing the right candidates. If you would like to know more or are interested in attending one of our roadshow events, you can contact Contact Cheryl Sharp, Head of Business Development, on 07341 072491 or cheryl.sharp@ymca.co.uk.

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