In 2017, the government will push ahead with the new Apprenticeship Levy (AL). This will place more responsibility on larger UK employers to meet the needs of their workforce through modern apprenticeships.
It’s hoped the new scheme will encourage more 16-18 year olds into jobs, while giving employers more control over how their apprentices are trained. The AL aims to fund three million apprenticeships in the UK by 2020 and will come into effect in April 2017.
What does the Apprenticeship Levy (AL) mean for employers?
The AL is a new ‘tax’ on UK employers. It will replace taxpayer funding of apprenticeships, and will require larger employers (with an annual pay bill of £3million plus) to take on more apprentices than ever before. The levy will be charged at 0.5% of an employer’s annual pay bill via Pay As You Earn (PAYE).
Employers will be able to reclaim their AL contributions as digital vouchers to pay for training their apprentices. The voucher scheme will not apply in Scotland, Wales and Northern Ireland (more information on how AL funds can be reclaimed across the UK, will be released at a future date).
A step-by-step guide for employers:
- In January 2017, the government will open the Digital Apprenticeships Service (DAS) online portal. Employers can register an account, through which they pay the levy and accrue ‘credits’ or vouchers. The government will then add a 10% ‘top up.’
- Employers will plan their own apprenticeship scheme.
- They can ‘shop’ for training providers and agree a price, in line with relevant funding bands. Providers will then deliver the training.
- If the employer is satisfied with the training, they pay the provider through their AL credits/vouchers (England only).
Smaller employers, who will not pay the levy, will remain outside this system until 2018/19 and will be able to access apprenticeships under the current system of government funding via training providers.
What does the Apprenticeships Levy mean for training providers?
The AL puts employers in the driving seat and will allow them to demand training which meets their specific business needs.
Through the DAS, employers will able to shop around from a list of approved and registered training providers (including private training companies, universities or colleges and employers themselves, who can also register as training providers.
Providers will need to be competitive, visible and willing to work closely with employers to meet their specific needs.
7 tips to make your apprenticeship training more valuable
Employers will be looking to get the most for their money from training providers. Here we give you some tips to help you make your training provision stand out:
1. Research
Through the DAS, large employers will be able to narrow down providers who can meet the needs of their business. Training providers will then be invited to interviews.
Being prepared with a plan, tailored specifically to the employer’s business will be key to winning contracts. The provider should carry out in-depth research into the business and prepare a detailed training proposal. This will help to make a great first impression and show that you understand the needs of the business.
2. Collaboration
Providers already collaborate closely with employers. However, as AL kicks in, employers will be looking to take on more apprentices and, more importantly, demonstrate value for money.
Training organisations need to show they can work with employers on a regular basis. Establishing a service-level agreement between provider and employer at the outset is an effective way of ensuring everyone understands their responsibilities. A goal-led guide about the training delivery will also help employers relate the apprenticeships to their business model. A close working relationship will build confidence between providers and employers.
3. Keep it simple
Simplifying the training process is important for employers, particularly as the number of apprentices taken on grows. Training providers should mirror the business practices of the employer, with agreements, resources and documents being concise and easy to understand. Appointing a dedicated point of contact within the training organisation – with whom the employer can check on the progress of their apprentices – will help iron out any problems and address concerns.
4. Flexibility is key
The AL will have a significant impact on both employers and providers, with the first years becoming a learning curve for both. Providers need to be flexible in their approach to training delivery, for example offering more in-house and mobile training or adjusting their methods along with the changing needs of the business.
5. Promotion and visibility
Training providers will essentially be showcased in a ‘shop window.’ An increased online presence, including being active on social media, will enhance your organisation’s visibility with employers. Make sure your website is simple, error-free and engaging.
You could also use your ‘alumni’ apprentices to act as ambassadors for your organisation – a great way to show employers that you have been successful in delivering training previously.
6. Competitiveness
Employer-led apprenticeship training will inevitably mean providers need to be more competitive. It’s hoped the AL will inject competitiveness among providers and thus drive quality upwards. Research your competitors to see what they do better and how you can promote your organisation more effectively.
7. Meeting Standards
Registered training organisations will need to meet certain standards set down by the employer. Showing evidence of the qualifications and relevant experience of training staff, teachers and tutors will become increasingly important. Training organisations should be able to show that their staff have the appropriate knowledge of the business sector they are working in. Providers should also be able to show the financial health of their organisation, compliance with equality legislation as well as adherence to health and safety regulations.
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