Back in April 2017 the government introduced the Apprenticeship Levy; a legal requirement for employers with an annual pay bill of over £3 million to pay 0.5% of their pay bill into a ‘digital levy account’, meaning this money could then be spent on recruiting apprentices into the business.
(Far right) Ashley Glendinning – Zenith People’s Business Administration Apprentice
The scheme was brought into effect to help the government reach their target of 3 million apprenticeship starts by 2020; requiring employers to set money aside that could only be spent on bringing apprentices into the business. However, the latest figures tell a very different story; apprenticeship starts have dropped by 59% between May and July 2017 compared to the same period in 2016.
There has been a great deal of confusion around the new scheme, and a number of employers are still trying to get to grips with the rules around paying the levy and how it is used to finance apprenticeships in their business.
As well as this, the levy has also affected smaller employers. They are now required to pay 10% of the apprenticeship costs and must allow the apprentice one day a week away from the workplace for training purposes.
The scheme required employers to make their first payment into their apprenticeship pot in May 2017, however with 24 months to spend the funds before they expire, the drop-in apprenticeship starts could indicate that these employers are using the time to fully identify areas within the business that have working opportunities, assess training plans and seek current schemes on offer.
The chances are that once the employers who have a limited understanding of the scheme are fully aware of how the money should be used, the apprenticeship starts will begin to increase.