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Making the apprenticeship levy work

The government’s Apprenticeship Levy will come into force in April next year, requiring all UK employers with a pay bill more than £3 million each year to invest in apprenticeships.

When it was announced, then-chancellor George Osborne predicted the levy would generate £3 billion a year for the economy and train three million apprentices.

There exists a temptation to view the levy as ‘just another tax’ – with the added pressure of Brexit and the new National Living Wage, some firms are fearful that the level will place an extra, unaffordable cost on business.

Additionally, many businesses are still unaware of the levy or have little understanding of how it will work, and are concerned about the looming deadline and their ability to prepare for the new policy in the timeframe allowed.

These concerns are understandable; however, it is possible for organisations to reframe the levy as an opportunity to get the right skills into their workforce. The key is to seek pragmatic advice on how to get meaningful return on levy payments – not simply ‘using up the pot’ but targeting investment on attracting and growing talent with a focus on improving the bottom line.

Capita Talent Partnerships, which is running events to help businesses get the most out of the apprenticeship levy, has offered a number of tips on how to get the most out of the levy when it is introduced:

  • Make the most of the funding: around 98% of firms – those with a payroll of less than £3 million a year – in England will have 90% of the costs of training paid for by the government. Extra support, worth £2,000 per trainee, will also be available for employers and training providers who take on 16 to 18-year-old apprentices or young care leavers.
  • Consider the levy as an investment in your workforce, not just a pot of money to spend. Apprenticeship schemes are renowned for building loyal, ambitious and committed employees so think about where they would be of most use to your organisation.
  • Start planning and preparing now – April will come around quickly, so it’s important to prepare HR departments for the change and think strategically about how you will put your apprentices to use.

Capita is strongly committed to encouraging apprenticeships and operates several successful schemes. These include a scheme with a multinational high street bank, which has trained 700 apprentices since its launch in 2011, an apprenticeship programme for the DWP designed to meet the needs of the long-term unemployed, and an apprenticeship scheme with Civil Service Learning for level 4 for apprentices at executive officer grade. The success rate of this scheme is 85% – double the national average.

Although preparing for the Apprenticeship Levy may represent a challenge, the rewards generated by this additional funding will include greater employer investment, more apprenticeship products at better rates, and more potential apprentices – this can only be a good thing.

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