The Apprenticeship Levy scheme was introduced in April 2017 with the aim of boosting productivity and creating three million apprenticeships by 2020.
However, two years on, employers lost access to £26 million of their apprenticeship levy funds last month (June) with £11 million lost in May, 8 per cent of the £135 million employers paid in May 2017.
The figure means that a “staggering” £37 million has been clawed back by government after the first two months that levy funds can expire from employers’ accounts.
As per levy rules, big businesses with a payroll of £3 million or more who pay into the pot have a 24-month limit to spend their funds. Once that time is up, the funds expire on a month-by-month basis.
As well as funding apprenticeships in levy-paying employers, levy contributions can also be used to fund training for existing apprenticeship learners and new apprenticeships in non-levy paying employers.
That said, employers should not be discouraged from using levy funds – as the skills shortage worsens, they need to make the most of the scheme now more than ever.
How does the levy work?
The levy requires employers with an annual wage bill of more than £3m to pay 0.5% of the company’s annual wage bill into the levy “pot”, which is used to cover the cost of approved training. Each employer that has paid in to the pot has an annual allowance of £15,000, accessed through a digital account.
Getting the most out of the levy employers can:
- Check the balance of funds available in their levy digital account and keep in mind the “expiry date” of 24 months following the date of payment, when the funds will be lost
- Review guidance or seek advice to ensure that use of their funds is tailored to the organisation to get the most out of them, paying particular attention to current and future skill needs
- Select a training provider that best aligns with the business’s needs and select training programmes that best address any skills gaps
- Remember - the levy funds are not just for creating apprenticeship positions, they can also be used to upskill existing staff
- Regularly review their apprenticeship funds to help bolster their workforce
Doncaster College has a long history of working with the local business community to train and develop young people through apprenticeships and can advise on ways to develop and train your workforce. For further information contact 0800 3587979 or email email@example.com