Background and how Government funded apprenticeships work
The apprenticeship levy introduced in April 2017 is the Government initiative to fund three million places for apprentices by 2020. The levy applies to employers who bill over £3 million each year, however, all employers can benefit drawing from the scheme regardless. As of May 2017, there were significant structural changes to the apprenticeship funding systems including the introduction of the Apprenticeship Service.
There are other eligibility criteria to meet in order to benefit from apprenticeships:
- Employers can only use funds to pay for apprenticeship training and assessment for apprentices that work at least 50% of the time in England and up to the funding band maximum.
- Employers will need to pay the difference where the cost of training and assessment goes over the funding band maximum (from August 2018 the banding will range from £1,500 to £27,000). Funds made available by the Government cannot be used to pay for other associated costs, such as salary, travel and setting up work placement programmes.
Types of apprenticeships
- Apprenticeship standards – Each standard covers a specific occupation and sets out the core skills, knowledge and behaviours an apprentice will need. This is known as ‘trail blazers’ and will consist of a group of at least 10 different employers as members.
- Apprenticeship frameworks – This is likely to be a popular route and refers to a series of work related vocational and professional qualifications, including workplace and classroom based training.
Other rules and guidance
The Government stipulates various rules and guidance to manage the apprenticeship arrangement for both types of apprenticeships defined above. Here is a summary of the key points:
- There must be an apprenticeship agreement confirming employment arrangements between the apprentice and employer
- There must be a genuine job available during the apprenticeship
- The cost of the apprentice’s salary must be met by the employer
- The apprentice must have appropriate support and supervision on the job to carry put their job
- The apprentice must have the right to work in England and spend at least 50% of their time working in England
- Funds must not be used to pay for skills already attained by the apprentice
How can SMEs benefit?
Inevitably there are some administrative hurdles involved along the way, however, the levy does present a number of opportunities for SMEs who can take advantage of the available funding whether the business is required to pay the levy or not. It is important to note that non-levy paying employers will share the cost of training and assessing their apprentices through ‘co-investment’ – the split is 10% to the employer and the remaining 90% will paid by the Government up to the funding band maximum.
The range of equivalent educational levels funded is up to master’s degree level (level 7). This offers a great deal of scope for employers – Deloitte for example, reported this year that almost half of their graduates are now undertaking apprenticeships.
The CIPD findings show that 80% of employers have maintained or improved future skills in the business, 70% of employees have seen improvements in the services they offer and 66% of employers experienced boosted employee morale.
CBW’s HR Consultants are available if you need further advice about how to benefit from the Government initiative – including apprenticeship agreements, apprenticeship routes and apprenticeship funding rules and guidance. For further information, please contact Laila, the author, on the details below.