Apprenticeships are a means of formal vocational training, whereby an apprentice gains recognised qualifications and essential skills alongside working and earning a wage. Apprenticeships are available across a wide range of sectors. They are intended to equip individuals with the necessary skills, knowledge and behaviour they need for specific job roles, future employment and progression.
Apprenticeships are an opportunity for businesses to circumvent potential issues by ensuring new recruits are trained in the skills they need and by up- and re- skilling existing employees. They can also be a good way to attract the best young talent to an organisation.
Employers with an annual payroll amounting to more than £3 million will already be required to pay the apprenticeship levy as of 6th April 2017. In return, they access funds equal to levy payments through the apprenticeship service. This is the platform through which levy-payers receive levy funds, manage apprentices and manage payments of levy funds to training providers. Levy funds can only currently be used for apprenticeship provision. Levy payers also receive a 10% top-up from government to their monthly contributions.
Non-levy-paying organisations are required to pay just 10% to training organisations towards the cost of training and assessing their apprentices. The government will directly pay the training organisation the remaining 90%, up to the funding band maximum.
Alongside training costs, employers are required to pay apprentices a wage.
Transferring Funds - Since the end of April, levy-paying employers will have seen their transfer allowance in their apprenticeship service account and since May, they have had the ability to fund apprenticeships in one other organisation through a transfer. Receiving organisations are consequently now able to register on the apprenticeship service and add details of their apprenticeships to this, in order to receive transfer payments. From July onwards, the previous restriction allowing transfers of up to 10% of levy funds to just one other organisation is to be removed; this will allow levy payers to transfer a total of up to 10% of their levy funds to as many employers as they choose. Currently, levy-payers can transfer a maximum 10% of their annual levy funds. The 10% government top up will be included in calculating this amount.
Frameworks to Standards - The Institute for Apprenticeships is currently working with ‘trailblazer’ groups, consisting of employers to create and develop new apprenticeship standards, which will replace apprenticeship frameworks by 2020 and each apply to a single occupation. Standards are produced with business and industry in mind.
T Levels - T levels are being proposed nationally to overhaul existing technical education provisions. The first three T levels in Digital, Construction and Education and Childcare will be taught from 2020. The full set of T levels will be introduced by 2022.
Apprenticeships at all levels offer people vocational routes into work which allow businesses to develop the skills needed as workforces develop. Apprenticeships are an opportunity for employers to ensure that their businesses can lead advancements in technology, culture and shifting work patterns. The Greater Birmingham Chambers of Commerce are keen to dispel confusion about recent and ongoing reforms to apprenticeships, and to encourage businesses to consider taking on apprentices.
As more developments are announced, the Chamber is growing significantly concerned by the increasing complexity of the apprenticeship system, and we encourage the government to take steps to simplify it.
This “Hot Topic” and briefing paper is sponsored by Aston University.
Aston University has over 100 years’ experience working in close partnership with enterprise, learners and communities to nurture professionals with relevant skills as well as knowledge that can be directly applied to business and industry. These partnerships include student placements, graduate job pathways, co-funded collaborative research and bespoke training courses. Aston is particularly known for its productive partnerships with local and global SMEs, as well as its strong links to large organisations such as BMW, HSBC, Greater Birmingham Chamber of Commerce and Jaguar Land Rover.
Aston became the first University in the UK to offer degree apprenticeships in 2015 and is the first to have alumni who graduated the Digital and Technology Solutions Degree Apprenticeship in July 2017. By delivering practical degree apprenticeships developed with industry and approved by professional bodies, Aston has become the University of choice for organisations including Microsoft, Virgin Media, CGI, Capgemini and a growing number of SMEs, who are using degree apprenticeships to fill skills gaps and increase productivity.
Click here for more information and advice about the levy and degree apprenticeships at Aston University.