As you may have expected, the Government’s initiative to introduce three million new Apprenticeships by 2020 has created a funding dilemma – the solution being that the shortfall will essentially be funded by employers in England who have an annual pay bill of over £3m.
The levy came into force on 6 April 2017 and is set at 0.5% of an employer’s total wage bill. It is paid via PAYE monthly and in return, each employer receives an annual allowance of £15,000 to spend on approved apprenticeship training programmes – this allowance is also applied monthly and any funds not used by employers can be carried forward.
Employers are able to access a ‘digital apprenticeship service’, an online system where they can manage how much they are spending, and recruit apprentices through various training providers.
Many employers have argued that they should be permitted to decide how their own training budgets are allocated, whilst others are concerned that the initiative has placed more emphasis on the quantity rather than quality of training provided.