The aim of the Apprenticeship Levy is to encourage organisations to help meet the governments target of creating 3 million Apprenticeships in 5 years. Employers with an annual payroll of more than £3 million will pay 0.5{49e487dc58d82578f23c5c406439cfce3a665cb867e5bfeca07e901d95efa4b4} of the amount above that level into a digital pot. The Government will also top up the pot by an additional 10{49e487dc58d82578f23c5c406439cfce3a665cb867e5bfeca07e901d95efa4b4} a year.
The CBI fears that the scale of the costs involved will fundamentally reshape the training landscape. Pipp
a Morgan,the Head of Education and Skills at CBI says, “it only values Apprenticeships as training, and not other routes. And funds can only be drawn down for the off-the-job elements of an Apprenticeship. This is valuable, but on-the-job training where Apprentices are mentored is where a lot of the value lies and where a lot of the investment lies.”
The CBI also believes employers will have to find money to cover the other costs of an Apprenticeship away from their levy pots. It’s possible that businesses may face other budget cuts and a reduction in Apprenticeships.
We understand that if the Apprenticeship Levy is not used within 18 months it will be lost to the Treasury.
According to the CIPD:
- 10{49e487dc58d82578f23c5c406439cfce3a665cb867e5bfeca07e901d95efa4b4} of employers reporting plan to increase the number of Apprentices above level 3 and above
- One fifth of employers say they will decrease them in favour of level 2 Apprenticeships which is the academic equivalent to GCSE’s
- Less than 10{49e487dc58d82578f23c5c406439cfce3a665cb867e5bfeca07e901d95efa4b4} of organisations intend to use the levy
We are hoping for more details to present themselves in due course and will update when further information or actual processes are available.
