Since the Apprenticeship Levy was introduced last year, we’ve seen some huge changes in how UK companies are using apprenticeships to strengthen their business.
The Apprenticeship Levy affects businesses with a wage bill above £3m requiring them to contribute 0.5% of their annual payroll, above the threshold, into an apprenticeship training fund. The fund is then topped up by the government who invest 10% of the total value of your fund: meaning for every £1 you contribute, the actual amount going into the levy pot is £1.10.
Using the levy enables businesses to recruit new team members, or train existing staff, to fill skills gaps from a dedicated budget. Even if you use up your entire levy, you can still enrol onto apprenticeships: in this case, your business will only contribute 10% of the training costs, and the government fund the other 90%.
The introduction of the levy, and Apprenticeship Standards, has made apprenticeships available to those with a degree, or similar higher education qualification, making continued professional development even more accessible.
Subsequently, Baltic have been able to work with ambitious individuals, who may have not considered an apprenticeship in the past, to provide them the specialised training they need to succeed in the workplace. We’ve placed graduates in our own business, as well as other UK businesses, with great success, and hope to continue helping young people start their careers straight out of university, as well as people looking to progress their existing skills in their current job.
A year on since the Apprenticeship Levy has been introduced, it is now possible to transfer up to 10% of levy funds to another employer. This will allow employers, in the same supply chain, to benefit from the Apprenticeship Levy if the contributing company is unable to use their entire levy fund themselves. Levy funds expire 24 months after entering the digital account, so the introduction of the funding transfers will ensure more businesses benefit fully from the levy fund.
Employers who receive a funding transfer will be able to use these funds on team members starting the new Apprenticeship Standards from the 1st May. The funding is only eligible for Apprenticeship Standard courses and hopes to encourage smaller employers to utilise the advantages sector specific courses can bring to their business through apprenticeships.
Since the introduction of the levy, Baltic have been proactive in helping employers understand how the levy works and enabling them to better manage their levy funds. We will continue to provide dedicated support to levy payers with the introduction of our Levy Account Management Team: assisting more employers who are using the digital apprenticeship service, to reduce problems, and make accessing apprenticeship training as seamless as possible.
The levy has been extremely beneficial for businesses we work with, and our own team. We’ve seen a steady increase in the number of levy paying employers we’re working with and hope to see more of these positive numbers in the future as more businesses discover the value of apprenticeships.
Baltic are looking forward to working with more businesses on how to utilise their apprenticeship levy, and how these changes will benefit existing companies we work with in the future. If your business requires a consultation on how the apprenticeship levy can work for you, contact us, or read our available resources.