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What does the introduction of the new Apprenticeship Levy mean for businesses?

Over recent years apprenticeships have become a popular option for school leavers leaving full-time education, and increasingly for adults, offering people an excellent opportunity to learn new skills and earn money at the same time.

The apprenticeship scheme not only provides employers with apprentices straight from school but also gives them the opportunity to develop their existing workforce. Training usually lasts between one and four years, and can happen in the workplace or off-the-job – with the majority of training taking place at work with a workplace mentor.

In April of this year the government introduced an apprenticeship levy that requires all employers operating within the UK with a payroll of over £3 million a year to contribute 0.5% of their total wage bill to training the nation’s apprentices. This levy has been introduced to help improve both the quantity and quality of apprenticeships in the UK.

The aim of this scheme is to help to close the skills gap and boost the UK economy by encouraging employers to develop the next generation of talent.

So, what does the introduction of the levy mean for your business?

There have been questions about the new scheme, but it can benefit companies. If your organisation doesn’t quite meet the threshold for contributing to the apprenticeship levy, then any apprentices you hire can be subsidised by the funding, making developing fresh young talent an even more attractive prospect than ever before. 

If your business has a payroll of over £3 million, then you will have to pay the levy, but funds can be used towards your own apprenticeship programmes, and these can be for existing employees and include higher level skills. This is also a sound investment for the future, and the benefits that apprenticeships can bring far outweigh the fee that needs to be paid.

Why is the Apprenticeship levy so important?

It’s becoming more and more difficult to find qualified staff for certain sectors and job roles, and it is unsure if sourcing staff from overseas will still be possible following on from our exit of the EU in March 2019, leaving many companies no choice but to commit more resources to finding new talent.

This uncertainty and lack of available staff is now leading many business to look for alternatives and developing home grown local talent from a young age is becoming an extremely tempting alternative. This has started a trend of Kent businesses taking advantage of the apprenticeship levy to develop young talent, with the figure rising to 2290 apprentice’s in the last four years, which also contributes to the government’s plan to create 3 million apprenticeship by 2020.

So what should companies in Kent and Medway be doing about apprenticeships?

Some companies – usually very large ones with a significant in-house training operation – are themselves registered providers and run their own apprenticeship schemes. Most, though work with external registered providers (colleges, training companies and universities), who have been selected by Government to offer apprenticeships, know how the system works and are best placed to navigate all the changes taking place.

While the new apprenticeship scheme can create opportunities to access Government funding, the money comes with conditions. Simply ‘following the funding’ runs the risk of the full needs of the business not being met. 

The best way to approach apprenticeships is to start with the talent and skills needs of the business and see if they can be addressed through the apprenticeship scheme. If the right providers and standards can be found, apprenticeships have the potential to add a great amount of value in terms of attracting new people of the right calibre and also as a way of developing existing staff.

What are the next steps?

1.       Assessing recruitment and employee training needs.

2.       Choosing the apprenticeship standards and providers that can best contribute to meeting those needs.

3.       Establishing provider partnerships that will ensure long-term success.

If you are considering apprenticeships as a way to support your business, Locate in Kent can help find the best local and national providers.  To find out more details please contact our Skills Adviser, Steve Matthews on 01732 520 700 or email on steve.matthews@locateinkent.com

Search and find the perfect commercial property in Kent for your business. Locate in Kent gives advice and relocation support to international and UK companies looking to move or expand. Call +44 (0)1732 520700 or email enquiries@locateinkent.com


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Locate in Kent would like to thank - Canterbury Christ Church University, Discovery Park, Frogmore, Kent County Council, Liberty Property Trust UK, London Array, Medway Council, Thanet Earth, University of Kent and Visit Kent - for the use of their images on this website.

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