Major apprentice changes taking place
The latest figures show that there is currently the highest number of apprentices on record, with 900,000 apprentices in 2016 alone. The introduction of the apprenticeship levy is estimated to double the annual investment to £2.5 billion. It has long been an ambition of the government to create 3 million new apprentice starts by 2020 and the latest changes taking effect signify their intent.
From the 6th April, companies with a total annual wage bill of more than £3 million have to pay an apprenticeship levy. Employers will have to pay 0.5% of their annual pay bill, minus a £15,000 government allowance to offset against this amount. The levy is paid through the normal PAYE on a monthly basis in to a digital apprenticeship account. The funds remain in this account for a maximum of two years and should be spent on training and assessing apprentices.
Changes to apprentice funding and frameworks
Smaller employers, or those whose wage bill does not meet the £3 million threshold, will also see changes to the way they fund apprentices. From May 2017, employers will have to pay 10% of the cost of apprenticeship training with the government paying the remainder, up to a maximum funding cap. The government is calling this initiative ‘co-investment’.
In addition, apprenticeship frameworks are being phased out to be replaced by apprenticeship standards, designed by employers to deliver workplace skills. Learners currently on frameworks will continue on this apprenticeship past the withdrawal date until they have completed the certificate. New apprentices will be taken on on the new standards with the frameworks closed to all new starts by the end of September 2017.
Public sector apprentice targets
New Regulations came in to force on the 31st March 2017 which require public sector bodies to meet specified apprenticeship targets. Public sector bodies who have a headcount of 250 or more employees on the 31st March each year have to reach a target of new apprentice starts which is equal to 2.3% of their headcount in England. The target applies for a four-year period from April 2017 – March 2021. For example, employers with a headcount of 1000 employees have to take on 23 new apprentices each year of the target period.
Protection for apprenticeships
An independent Institute of Apprenticeships was launched from the 3rd April 2017. The institute was set up to ensure the quality of apprenticeships reaches the government’s required high standard and deliver the skills that employers need. The board will be made up of leading business figures to ensure employers’ needs are met and the standards can be challenged by those taking on apprentices.