The government is officially launching its apprenticeship levy
today (6 April 2017) as part of the biggest shake-up of skills
for a generation.
The levy will require all employers in the UK with an annual wage bill of over
£3 million to pay 0.5% of it towards funding apprenticeships.
The money will be invested in quality training for apprentices
and double the annual investment in apprenticeships in England to
£2.5 billion by 2019 to 2020, compared with 2010 to 2011 levels.
Employers in England can set up an online account to manage their
funds and invest in training for apprentices working for them -
currently around 100 accounts are being set up every day. The
government will then provide a further 10% top up to levy
contributions each month into employers’ accounts.
The levy will encourage employers to invest in high-quality
apprenticeships ensuring even more people have a chance to reach
their full potential.
Generous support will also be provided for smaller employers with
an annual pay bill below £3 million and therefore not required to
pay the levy. The government will pay 90% of the costs of
training and assessing their apprentices.
In addition, companies with fewer than 50 employees that take on
apprentices aged between 16 and 18 will have 100% of their
training costs paid for.
This is on top of a range of support for apprentices who have
additional needs, including around £60 million of funds towards
training those from the poorest parts of England
Skills Minister said:
There has never been a more important time for Britain to
invest in the skills of our people and businesses. To make
Britain stronger and fairer, we need to make sure that everyone
gets the chance to climb the ladder of opportunity to gain the
education and skills they need to be successful in life.
Our apprenticeship levy is a massive part of this. More than
90% of apprentices go into work or further training, and the
quality on-the-job training on offer will make sure we have the
people with the skills, knowledge and technical excellence to
drive our country forward.
Building an apprenticeship and skills nation is essential in
ensuring that we have the home-grown workforce we need in
post-Brexit Britain to address the skills shortages facing
industry and give everyone the chance to succeed.
The introduction of the levy is the biggest shake-up of skills
for a generation and further supports the government’s commitment
to deliver 3 million apprenticeships by 2020 - there were a
record 900,000 apprentices last year.
In addition to the levy, the Institute for
Apprenticeships was also launched this week (Saturday 1
April). Independent from government, the institute, which is to
be chaired by Antony Jenkins, has been launched to ensure that
all apprenticeships are top quality and deliver the skills that
employers need.
Notes to editors
- In October 2016, the government published its final funding policy
for the apprenticeship levy, which sets out in detail how
the levy will work.
- In March 2016 the government published an apprenticeship guide
for employers on how they will pay the levy, access
the apprenticeship service and pay for apprenticeships in
future.
-
An online apprenticeship
service has been developed to enable levy paying
employers to manage their apprenticeship funds, help them to
estimate their spend and recruit apprentices through their
training providers.
- To help employers see how the levy and funding system will
work for them, the government has created an online calculator:
estimate my apprenticeship funding . The simple-to-use
tool will enable employers to understand how much levy they will
pay and how they could use their funds to pay for training in
future.
- The Department for Education, Education & Skills Funding
Agency and HMRevenue
& Customs have been working with large- and mid-sized
organisations, as well as representative bodies, to ensure they
are aware of their responsibilities under the new levy, and that
their payroll teams have the information to report their
contribution and pay it.
- Individual apprenticeships will be placed in 1 of 15 bands,
each with an upper limit ranging from £1,500 to £27,000 which
limits the amount government will pay.
- In January 2017 the government launched an industrial strategy
green paper: ‘Building our industrial strategy’. Skills are
a big part of the green paper, which aims to deliver an economy
that delivers good, skilled, well-paid jobs and creates the
conditions for competitive, world-leading businesses to prosper
and grow right across the UK. The green paper is currently out
for consultation and closes on 17 April.
Colleges, employers and other organisations have been lending
their support to the apprenticeship levy:
TUC General
Secretary Frances O’Grady:
The apprenticeship levy is good news for workers, who will have
more opportunities to gain the skills needed for better paid
jobs.
Unionlearn, the TUC and trade unions across
the UK are
looking forward to working with employers to make the expansion
of good quality apprenticeships a success.
Petra Wilton, director of strategy for the Chartered Management
Institute:
The new apprenticeship landscape provides much needed changes,
which put employers in the driving seat for developing new
apprenticeships standards to meet the skills they need. And
with poor management capabilities a key reason
for UK’s poor
productivity, it’s hardly surprising that the chartered
manager, along with digital and engineering, is one of the
fastest growing of degree apprenticeships.
A key difference is that the new apprenticeships are for all
ages and at levels, meaning that not only can employers support
young people, but also can support the career prospects of
those already at work. Already apprenticeships are supporting
the creation of better-balanced organisations, with half of
apprenticeships being taken up by women, and the new degree
level apprenticeships also beginning to provide development
opportunities for women returners.
The wider appeal of work-based learning, enabling workers to
learn and earn at the same time, promising both much greater
social mobility for individuals alongside a wider talent pool
for employers.
Verity O’Keefe, Senior Skills Policy Adviser at EEF:
Apprenticeships have been ingrained within manufacturing
businesses for decades with apprenticeships in our sector
viewed as the gold standard. With a yawning skills gap
apprenticeships play a key role in ensuring manufacturers have
the skills they need now and in the future. The apprenticeship
levy is a fundamental reform that many employers are still
struggling to get to grips with and many employers are
proceeding with caution. Despite these challenges, the levy is
also presenting new opportunities.
Almost half of manufacturers (46%) plan to increase their
engineering apprentice numbers when the levy kicks in and over
a third (35%) will look to place apprentices in other parts of
the business. Employers are also looking to boost the skills of
their existing workforce with almost half (47%) of
manufacturers planning to use apprenticeships to up-skill and
re-skill their workforce.
To be a success employers need a pipeline of learners to fill
their apprenticeship vacancies. We must continue to bang the
apprenticeship drum and ensure the next generation know that
apprenticeships in manufacturing and engineering offer a
challenging and rewarding career.
Lizzie Crowley, Skills Advisor CIPD:
Today, there is a new appreciation of the benefits
apprenticeships can bring for individuals, businesses and the
economy. Apprenticeships cover a huge range of occupations and
sectors, including digital media, public relations, accounting,
engineering, human resources and cyber security, and are
available all the way up to a degree-level qualification. For
young people starting out in their career, or for those seeking
to upskill or change direction, a high-quality apprenticeship
pathway offers the chance to earn an income whilst building
vital skills.
For employers, apprenticeships are a great way to grow your own
talent. By combining on-the-job training with off-the-job
learning they can help deliver the skills your business needs
to succeed. The launch of the apprenticeship levy offers
organisations the opportunity to refresh their businesses and
workforce development strategies, and consider the role that
high quality apprenticeships can play in delivering their
future workforce.
Mark Dawe, chief executive of the Association of Employment and
Learning Providers:
The levy will engage more employers in apprenticeships on a
scale never seen before and it will undoubtedly have a positive
impact on UKproductivity. Training providers see
it as an opportunity to attract more young people on to
apprenticeships, offering them a high-quality route to a
successful career, as well as transforming the skills of the
existing workforce. The levy means that apprenticeships have
the potential to become one of the biggest drivers of social
mobility which makes it an exciting time to be a training
provider.
David Hughes, Chief Executive of the Association of Colleges
(AoC):
Apprenticeships are a powerful way for people to enter
employment and develop a career as well as helping people
progress in work to higher levels. We believe they will play a
major part in filling skills gaps and shortages, supporting
social mobility and helping to improve productivity.
The introduction of the levy shows how committed the government
is to skills training and further education colleges will play
a significant role in providing high-quality apprenticeship
training.
Ulf Bengtsson, Group Head of Leaning and Development at British
Gas owner Centrica:
Centrica has embraced the government’s ambition to create more
quality apprenticeships.
Over the past 10 years we’ve invested more than £260 million in
training 6,000 engineers and apprentices, because we recognise
the positive impact this has on both our customers and business
performance.
By choosing to pursue a high-quality apprenticeship that is
developed by leading employers for apprentices of all ages,
which also offer flexibility and transferable skills, the
opportunities to reach to the top are limitless.
The Director of Public Prosecutions, Alison Saunders:
Staff development is a key priority for the Crown Prosecution
Service (CPS)
and our success as an organisation is based on the quality and
professionalism of our people. I have seen for myself the
brilliant work that apprentices can do and how they can help
the CPS deliver justice
across the country. We currently employ 150 apprentices in a
variety of roles including supporting our casework, operational
delivery and many have developed initiatives which have helped
improve CPS performance. I’m
delighted that many go on to secure permanent roles in
the CPS.
