Over 130,000 businesses across the UK offer Apprenticeship places because they recognise their effectiveness at increasing productivity, improving business performance and ensuring a committed and competent workforce.
Recruiting apprentices enables employers to fill the skills gaps that exist within their current workforce as apprentices begin to learn sector specific skills from day one; developing specialist knowledge that will positively affect your bottom line.
In addition to eager, motivated staff who are committed to on the job training and development, industry research has highlighted numerous direct and indirect benefits of Apprenticeships for both recruiting new apprentices and for training your workforce.
* Data compiled by the National Apprenticeship Service
Was first announced by the Chancellor George Osborne in the November 2015 Budget, the Apprenticeship Levy aims to fund 3 million apprenticeships in the UK by 2020. It affects all organisations above a certain size, committing them to either taking on apprentices or paying a percentage fee of their PAYE wage bill.
Does the Apprenticeship Levy affect my organisation? If your payroll comes to over £3m a year, the answer is yes.
What will it cost?
The levy will be 0.5% of your PAYE bill however there is an allowance of £15,000
What does it mean in practice?
Employer of 250 employees, each with a gross salary of £20,000
Paybill: 250 x £20,000 = £5,000,000
Levy sum: 0.5% x £5,000,000 = £25,000
Allowance: £25,000 – £15,000 = £10,000
What is the aim of it?
While some are calling it a tax on business, the main aim is to persuade you to take on more apprentices. They can be from outside your organisation, but you can also retrain current employees to take the next step on their career ladder, or to change direction.
When does it come into force?
To allow businesses and other organisations to plan ahead, the Levy only takes effect in April 2017.
Does it affect Public Sector organisations as well as businesses?
Yes, the Apprenticeship Levy will affect the public sector in the same way as the private sector. But all public sector organisations will be required to make sure that 2.3% of their workforce are apprentices at any one time.
National Insurance Contributions
From 6 April 2016 employers will not be required to pay employer National Insurance contributions for apprentices under the age of 25 on earnings up to the upper earnings limit.
National Living Wage
The introduction of the National Living Wage from April 2016 will mean a 7.5% increase in hourly pay for someone aged 25 or over on the National Minimum Wage. This means that apprentices aged 25 and over will be entitled to at least £7.20 per hours.
Institute for Apprenticeships
A new independent body, led by employers, will be fully operational by April 2017 to support the quality of apprenticeship standards in England. It will be responsible for setting quality criteria for the development of apprenticeship standards and assessment plans; reviewing, approving or rejecting them; determining the maximum level of Government funding available for standards; and quality assuring some end point assessments.
Apprentice National Minimum Wage (NMW)
From the 1 October 2016 the rate of pay for apprentices will increase by 3% to £3.40 per hour. However most receive more; a median basic hourly pay rate of £6.31 for Level 2 and 3, and £9.68 for Level 4 and 5 Higher Apprentices.
Apprenticeship Grant for Employers (AGE)
AGE has been extended until the end of the 2016/17 academic year. Eligible employers can receive a £1,500 grant per apprentice (aged 16 to 24) for up to five new apprentices. It is available to businesses with fewer than 50 employees who have not taken on an apprentice in the last year.
Employers and Universities are involved in co-designing apprenticeships to meet full occupational competency where the apprentice completes a degree (bachelor’s or master’s) as part of their apprenticeship. These apprenticeships give people the opportunity to attain a degree from some of the best universities whilst training in a top flight career. Degree Apprenticeships are already live in sectors such as Automotive, Banking, Digital Industries, Chartered Surveying, Aerospace and the Nuclear Industry.
Announced 24 March
10 million fund to boost the number of degree apprenticeships available, providing more opportunities for young people to fulfil their potential.