Employers will have access to a digital account to spend levy funds on the approved training of their apprentices. It will also be possible to apply for 'top up' funding above what has been contributed, paid out of funds unused by other companies.
Small employers will have access to funds provided, without a requirement to contribute, as a £3m payroll threshold applies (a £15,000 allowance against the levy).
However the cost is significant for larger employers – for 4,000 employees at or around average wages, there is an extra cost to the employer of £500,000 per year. Clearly there is an economic imperative to use the funds generated for training and developing staff, rather than being a dead cost to the business.
Funds unused are expected, after a period, to go back into the pot, to be available to other employers as top up contributions.
Whether small or large, it makes sense for employers to have relationships with suitable training providers. But a new apprenticeship strategy goes beyond choosing good training providers. We recommend a dialogue between HR and the finance team to develop a plan, such as:
- Which roles are or could be suitable for apprentices? This does not have to be entry-level only – training on promotion to managerial roles may qualify.
- Which employees are suitable? Because funding is released at the end of successful training, turnover of staff carrying out apprenticeships should be minimised.
- Can training be outsourced with a provider qualifying under the scheme?
- Should in-house training be verified and accredited?
Our tax, employment and education sector experts can assist your business with planning for change.