In April 2017 Apprenticeship funding will change in England for all employers and some employers will be required to contribute to a new Apprenticeship levy.
Whether you’ll be a levy payer or not, our team can help you understand and make the most of the changes taking place so you don’t miss out on the opportunities they present.
Who will pay the levy?
The rate for the levy will be set at 0.5% of an employer’s wage bill where it exceeds £3,000,000 and will be collected via PAYE. (So, if you are an employer, in any sector, with a pay bill that exceeds £3 million pounds, this will include you).
You will, however, receive an allowance of £15,000 to offset against any payment due.
So for example a business with a £3m employee payroll will pay:
£3,000,000 (pay) x 0.5% (levy contribution) = £15,000 (amount owing pre allowance) – £15,000 (levy allowance) = £0 (levy payable)
You will be able to access your funds through an online digital apprenticeship service account, and you will be able to set this up with the digital apprenticeship service in January 2017. The first time you will see any funds in your digital account will be May 2017 - a month after your first payment in April 2017.
What if your wage bill is less than £3,000,000?
In this case, you will not pay the levy. However, alongside the introduction of the levy there will be changes in the way apprenticeships are funded which will affect all business, large or small who employ apprentices.
From April 2017, there will be different funding bands for different apprenticeship programmes and employers with a wage bill below £3 million, will have to pay towards the cost of an apprenticeship*. The Government will pay 90% of the training costs and you will pay the remaining 10% directly to your chosen College or training provider. This will apply regardless of the apprentice’s age, and will give you more opportunity to hire individuals who suit your business requirements.
*There are some exceptions, for example for companies with fewer than 50 staff, and payments can be spread over the life time of the Apprenticeship with an agreed schedule to help, so please check the details with us.
At South Thames College we can offer you the advice and guidance you need to make the most of your apprenticeship spend.
What should employers do now?
If you are an employer, already supporting apprentices, use the ‘Employer Levy Calculator’ to check how much money you will pay towards the levy (if any).
If you are an employer who doesn’t currently take on apprentices you may want to think about piloting some apprenticeship vacancies now. This will put you in a good position to make the most of the changes on the horizon.
If you wish to talk to someone about how to start a pilot or implement an ongoing strategy for apprenticeships, please contact us.
Talk to us about apprenticeships
Let's work together. We're the perfect apprenticeship partner – we'll help you find the right person, access funding, then recruit and agree a training plan for your apprentice.
How can we help?
Whether you are a levy payer or a non-levy payer, we can provide:
- Free support and guidance to ensure you take full advantage of apprenticeship opportunities
- A training needs analysis to identify and training requirements you might have
- Training and support to upskill both your existing staff and bring new recruits with talent into your organisation
- A comprehensive match and fill service – helping you to recruit the right candidate
Facts about South Thames College apprenticeships
South Thames College has been training apprentices for many years. We have welcomed over 500 apprentices to the College over the last 12 months on a range of programmes including: clinical healthcare support, health and social care, medical administration, dental nursing, childcare, professional cookery, civil engineering and building services, ductwork and dry-lining, electro-technical installation and plumbing, facilities management, motorcycle and motor vehicle maintenance, accountancy, hairdressing and many more.
We work with several hundred employers from multi-national organisations to individual businesses, such as St George’s Hospital, BBMV, WSP, Thames Tideway Tunnels, ISS, Merton Council, and Corbin and King. We work with many local businesses who take advantage of the courses we deliver to teach new, or boost existing, skills in their workplace.
Many of our apprentices are outstanding, winning awards like ‘Crossrail Apprentice of the Year’ (2013 and 2014) for our civil engineering apprentices with BBMV and Balfour Beatty, ‘City and Guilds Learner of the Year’ (2014) for our facilities management apprentice with NHS Property Services, the WISE (Women in Science and Engineering) Apprentice Award 2015, for our building services apprentice with Troup Bywaters and Anders.
Our apprentice success rates are high, at 79% for last year, putting us well above the national average. In our recent Ofsted inspection, our apprenticeships were graded 2 ‘Good’ with our apprentices described as developing very good work-related skills.
Our employer surveys show ongoing high levels of satisfaction. Our 15/16 survey shows 90% of the employers we delivered training for said the training they received met their needs, and over 90% would recommend us.
Where to find out more?