Feb 1ST

Are you ready for the Apprenticeship Levy?

From April 2017 the government is introducing an apprenticeship levy for all employers with a payroll in excess of £3 million.  This levy is part of a wider reform of the apprenticeship system which will affect employers of all size who plan to take on apprentices after May 2017.  Moulton College is keen to support employers across the specialisms in Construction and Land based industries to understand these changes and support you to continue to enjoy the benefits that apprentices can bring to your business.

Any UK employer, in any sector, with a pay bill of more than £3 million per year is liable to pay the levy which has been set at a rate of 0.5% of the payroll in excess of £3 million.  For example if your business has a payroll of £5 million they would pay a levy amount of £10,000 which is 0.5% of the £2 million payroll which is above the £3 million threshold.  You will calculate, report and pay your levy to HMRC, through the Pay as You Earn (PAYE) process alongside income tax and National Insurance. The levy will be paid into a digital apprenticeship account and the government will top up this account by an additional 10% meaning that employers in England who pay the levy and are committed to apprenticeship training will be able to get out more than they pay in.  If you are likely to be affected by the apprenticeship levy it will be essential that you register for your digital account prior to these changes coming into effect and this process opened in January 2017. Moulton College can provide support for any aspect of understanding the apprenticeship reform including support to set up specialist software and facilities.

You will not be exempt from the apprenticeship levy if you already pay into an existing industry training levy for example the Construction Industry Training Board (CITB) levy, meaning you will be liable to pay both levies, although the industry training boards may offer some transitional relief in the first year as is the case with the CITB .

Digital funds and government funding can only be used for apprenticeship training and assessment against an approved framework or standard with an approved training provider and assessment organisation up to the funding band maximum for that apprenticeship.  The funds cannot be used for wages, travel and subsidiary costs, managerial costs and the costs of setting up an apprenticeship programme. Digital funds will enter the account monthly and will expire 24 months after entering the account unless they are invested in apprenticeship training.  Funds will leave the account in the order they are paid but it will take careful planning to ensure that the levy funds are maximised.

Apprentices who have been accepted on to an apprenticeship before May 2017 will be funded for the full duration of the apprenticeship under the conditions that were in place at the time their apprenticeship started. If you pay the levy you will not be able to use the funds in your levy account to pay for these apprenticeships.

Should any employer want to employ more apprenticeships than are covered with their levy payments they are free to do so but each additional apprenticeship will follow the co-funding model where employers need to contribute 10% of the cost of apprenticeship training with the government funding the remaining 90% of the training and assessment cost.  The government will also fully fund any additional learning support and English and maths training required to support apprenticeship achievement.

In order to increase the quality and relevance of apprenticeship training, all current apprenticeship frameworks are being rewritten by employer groups into new apprenticeship standards.  These standards will be short, concise and clear and will set out the full competence needed in an occupation in terms of Knowledge, Skills and Behaviour (KSBs).  They should be sufficiently stretching so that they will require at least a year of sustained and substantial training and will align with professional registration where it exists.  All new apprenticeship standards will be assessed by an end point assessment which will test that the apprentice is fully occupationally competent in that role.  The intention is that all current apprenticeship frameworks will be replaced by new apprenticeship standards within the lifetime of this parliament and new standards are being developed to cover occupations not previously covered by current apprenticeships.  This includes higher and degree apprenticeship standards to address higher level skills shortages which accounts for over 40% of current apprenticeship standards being developed.

However current apprenticeship frameworks will still be available until they are replaced by relevant standards.  There is still time to get involved with development of apprenticeship standards or even work with a group of like-minded employers to start development of a new standard within your occupation if there is no relevant apprenticeship being developed.  Further details of apprenticeships standards approved or in development can be found here

From May 2017 there will be no fixed cost for training; employers will be able to negotiate training costs and content with providers up to set funding bands.  The upper limit of each funding band will cap the maximum amount of levy funds that can be used for each apprenticeship or the maximum that the government will ‘co‐invest’ towards apprenticeship training.  If employers want to spend more than the funding band limit to allow for additional or bespoke training then they will be free to do that but will need to fully fund this additional training.  Each apprenticeship will be placed into a funding band which will range from £1500 to £27000 with the majority of Moulton intermediate apprenticeships in the £1500 - £6000 band.  However when considered in the context of the benefits that apprenticeships can bring to a business, this contribution should soon be recovered in increased productivity and filling essential skills gaps. 

Moulton College is committed to support employers and learners wanting to take advantage of apprenticeships to support and grow their business.  Moulton College is a specialist college with a strong reputation for meeting employer needs in the construction and land based industries.  We have been working with employers across Northampton and surrounding counties to maximise the benefit of apprentices to help fill the skills shortage in land based and construction industries.  All Moulton apprentices benefit from customised training from an experienced team of lecturers and assessors with extensive industrial experience in their relevant sectors.  We are the largest provider of Construction apprenticeships in the region with opportunity for progression from intermediate to higher levels and offer unrivalled facilities alongside a supportive environment that ensures everyone achieves their goals. 

Moulton College employs a team of dedicated Apprenticeship Advisors to guide you through every step of the apprenticeship process.  Our advisors are specialist in your industry and have the experience and knowledge to guide you through every step of the apprenticeship process.  They can support initial recruitment including placing adverts on the National Apprenticeship website and highlighting your requirement with our current full time students.  They will also support both you and your apprentices throughout the apprenticeship training to ensure successful completion.  Moulton can also develop bespoke programmes to meet your requirements within our specialisms.

Moulton College can offer free advice and guidance on the changes to apprenticeships and how to best take advantage of the opportunity it will create.  We will be hosting a series of free information events over the next couple of months with the first being planned for Thursday 23rd February.  Come and join us for supper to learn how we can help you find a clear way through these changes to grow and develop your workforce filling current and future skills shortages.

You can pre-register for the event here.