The Apprenticeship Levy Explained
The Apprenticeship Levy was first announced by the Chancellor George Osborne in the November 2015 Budget:
“By 2020, we want to see 3 million apprentices…
Today I am setting the rate at 0.5% of an employer’s paybill. Every employer will receive a £15,000 allowance to offset against the levy – which means over 98% of all employers – and all businesses with paybills of less than £3 million – will pay no levy at all…
Britain’s apprenticeship levy will raise £3bn a year. It will fund 3 million apprenticeships. With those paying it able to get out more than they put in.”
Chancellor’s Budget Speech, 2015
Since then, the Skills Funding Agency, the Department for Education and the current Skills Minister – Robert Halfon M.P – have all confirmed that the Levy scheme will go ahead from April 2017. Employers will start paying into the scheme in May 2017. See our latest news for updates here.
The apprenticeship levy is a real turning point. The whole basis on which apprenticeships are funded will change. At the moment employers pay very little – in 2017 it’s estimated that employers will pay something like £2.6 billion into the apprenticeship levy scheme. And that is the pot that will largely pay for the training of apprentices.
The need for more apprentices is also widely recognised:
“The government’s advocacy of apprenticeship is perfectly well-founded. They are an excellent and cost-effective way of developing high-level skills, and raising economic productivity. And there is huge demand for them: not just at Rolls-Royce (where it is much harder to secure an apprenticeship than to enter a top Russell Group university), but across the economy and across all regions.”
Alison Wolf, “Fixing a Broken Training System: The case for an apprenticeship levy”, Social Market Foundation report, July 2015.
All of this means that there are many questions that employers will likely ask themselves: How does the Levy apply to my organisation? How can I create apprenticeships that are relevant and of good quality? Can I gain more from the Levy than I put in? Who can help us get all this set up effectively?
We’re working with some of the best experts in the field to both answer these questions and to create apprenticeships. See how we can help for more on what we can do right now.