From April 2017, businesses with a salary bill of more than £3m will be required to pay a levy to fund new UK apprenticeships.
Businesses required to pay the levy will have to make a payment of 0.5% of their salary bill. This will be payable through PAYE, alongside income tax and National Insurance contributions. However, these employers will be able to claim back their levy contribution in the form of digital vouchers which they can use to pay for apprenticeships.
Those paying the levy will receive an additional 10% top-up from the government to spend on apprenticeships.
One local employer who will be paying the levy when it comes into force is Cotteswold Dairy, who employ around 350 people. Cotteswold Diary’s Roseanne McEwan explains:
“We pride ourselves on our ability to offer employment opportunities to the local community but at the same time we need to ensure that we have a constant flow of fresh thinking and innovative ideas to safeguard our competitiveness. As such, we have been increasingly looking at apprenticeships as a means of ensuring that we have the skills that we need locally, so that we can drive our future growth.
While it certainly has its complexities, the apprenticeship levy gives us the opportunity to look at our apprenticeship programme more strategically. We are currently appraising our skills base and looking at how we might invest our levy money in the most effective way possible. This includes looking at higher apprenticeships, which provide top level skills for future managers and innovators.”
It is not just large employers who are being encouraged to offer more apprenticeships, smaller businesses who will not be levied will be able to offer apprenticeships that are 90% funded by the government.
Importantly, government apprenticeship funding is not just limited to providing opportunities for school leavers, as Andrew Webster, Head of Skills in Business at the University of Gloucestershire, explains:
“Undoubtedly the additional funding being made available for apprenticeships will provide new opportunities for school leavers but we are also helping businesses to explore how levy money and government funding could be used to upskill their existing employees. Higher and degree apprenticeships offer opportunities for even experienced managers to gain new knowledge and skills, which in turn help to enhance productivity and promote growth. We are working with local employers to develop effective apprenticeship packages that provide a subsidised and accredited alternative to ad hoc training and development.
By using apprenticeships in this way, large employers can make the most of their levy and smaller organisations can maximise all the funding available to them – a win win.”
Higher and degree apprenticeships combine on the job training with higher level study. They are employer-led and built around business needs, meaning employers benefit from an immediate positive business impact.
The University of Gloucestershire is working in partnership with local businesses to develop a chartered manager degree apprenticeship, and also offers a range of higher apprenticeships in health, care leadership & management, and leadership and management. It will soon be adding four more degree apprenticeships to its portfolio, in nursing, information security, the internet of things & cyber systems, and product design & development.
To find out more about higher and degree apprenticeships at the University of Gloucestershire, visit glos.ac.uk/apprenticeships.