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What Funding Is Available for Apprenticeships? The Latest on the Levy.

By Euan Blair

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If you're keeping up with the latest news on the levy, you know that the ambitious goal of three million UK apprenticeships by 2020 will likely be missed(opens new window).

But that doesn't mean we should all hang-up our hats and go back to traditional recruitment methods.

Because despite expert predictions on the numerical goal, the big picture vision for apprenticeships has already become a reality for thousands of employers. Levy or no levy, the workforce of the future is going to require diverse, digital-savvy talent—and there's no better way to secure your talent pipeline, than to grow and nurture it yourself.

Today, we're recapping the benefits of apprenticeships and the available funding opportunities to help make them a day-to-day reality at your organisation.

The benefits of apprenticeships

Before diving into the details of how to get funding for apprenticeships, let's take a minute to remember why it's worth doing in the first place.

  • True diversity - Apprentices help you build diversity into your org from the ground up, rather than trying to force it to happen from the top down.
  • Employee engagement - Line managers and current employees step into roles as mentors to apprentices, boosting autonomy and engagement in the team.
  • A futureproof workforce - A smart, proactive is crucial to closing the digital skills gap and keeping your company on the leading edge.

If all of the above isn't enough to get you excited about launching an apprenticeship scheme, how about the fact that the cost of your apprenticeships are completely covered by the levy?

Not too shabby, right? Here's how it works.

Will the government pay for an apprenticeship scheme?

Short answer: Yes.

The Apprenticeship Levy works like an additional payroll tax.

Set at 0.5% of an employer’s annual pay bill, the levy applies to all employers with a presence in the UK and with an annual pay bill of more than £3 million.

Your pay bill is based on the total amount of earnings subject to National Insurance Contributions. In a nutshell, any person who is on your payroll and paid through PAYE is included in your pay bill.

When you spend on apprenticeship training in England, the government will apply a 10% top-up to your levy account every month, at the same time the funds enter your digital account. So for every £1 that enters your digital account to spend on apprenticeship training, you will get £1.10.

Some employers may find that the funds in their digital account aren’t enough to cover the full cost of training all the awesome apprentices they want to bring on board.

In those cases, the government will contribute 90% of the total costs of the additional delivery.

There are even funds available(opens new window) for employers who don't pay the levy.

Sounds too good to be true, right?

We'll be honest, there is a catch.

Funds (including top-ups) expire 24 months after they enter your digital account, unless you spend them on apprenticeship training. Either use it, or lose it.

Still got questions? Check out our Apprenticeship Levy FAQs and Checklist.

How to get started with apprenticeships

If you're determined to not let the levy go to waste, you should know that launching an apprenticeship programme is much easier than most people think.

“First, work with chosen line managers who are 100% committed to taking part in the hiring process, prepare the onboarding, share valuable skills and support the apprentice throughout the whole experience. Then, champion line managers to promote the benefits of having an apprentice to the rest of the employees,” suggests Tom Watts, Programme Director at iHorizon.

When it comes down to trying something new, securing internal buy-in is the main hurdle for most talent professionals. But by starting with the right internal influencers, you can help slowly change your organisation's perception of apprenticeships and get your company on track for a healthy and successful future.

Euan Blair

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