As of April 2017 large companies will have to pay a levy to help fund apprenticeships in the UK. Although some business leaders are concerned about the financial implications this could have, many recognise the benefits that increased support for training could bring, with some seeing it as a solution to the skills gap that is currently affecting firms across the country.
The apprenticeship fund will be available to all businesses no matter what their size, however it will only be those with a pay bill of more than £3 million that will have to pay the levy.
One of the main issues causing concern amongst businesses is that the full finance bill won’t be published until spring, giving them limited time to design and implement an effective programme. To help combat this we suggest reaching out to the local business community, and speaking to a trusted business adviser or training professional will help companies create an apprenticeship scheme that is suited to their needs.
Why is the levy being introduced?
In recent years, many surveys have highlighted business leaders concerns regarding a skills shortage across the UK, with reports revealing that Britain is lagging behind many of its European counterparts when it comes to investing in young peoples’ skills and education.
To address the skills gap, the Government has pledged to create three million apprenticeships by 2020. However, in recent years some apprenticeship schemes have come under fire for not providing businesses or employees with the skills needed to succeed.
The introduction of the apprenticeship levy aims to combat this, putting businesses at the heart of training and allowing them to recruit, develop and build future talent from within their firm.
The launch of the Trailblazer Initiative aims to increase the standard of all apprenticeships at Level four and above, while the introduction of Degree Apprenticeships, looks set to boost training standards.
How can apprenticeships benefit businesses?
A report from Ofsted previously highlighted that although the Government’s renewed efforts to boost apprenticeships was commendable, it wasn’t sufficiently focused on implementing initiatives that benefit either employers or the economy.
New reforms have been introduced to encourage more firms to take on apprentices, and as of April 2016 companies will no longer have to pay National Insurance contributions for apprentices under the age of 25.
Increasing the number of apprenticeships will also increase the range of skills within the workforce, enabling companies to help create a new talent pool that addresses any skills shortages within their business.
By partnering with specialist training providers, such as BPP Education, companies can create a structured apprenticeship and school leaver programmes that are tailored to a company’s individual needs, helping their employees, and business, to thrive.
Some firms are also looking to the levy to boost the skills of their current workforce, using the fund to offer degree-level or higher professional apprenticeships to their existing employees.
How will it affect the future workforce?
Over the past few years we have seen a shift in the expectations of young workers, with culture and training now key factors when young people are considering potential job offers. Apprenticeship schemes will help employers address these new requirements, championing a high standard of skills and training within the workplace.
Some school and college leavers are also recognising that, in some cases, the traditional university route may not provide them with the skills needed to thrive in their chosen careers, and are looking to apprenticeships as a way to break into the sector of their choice.
The apprenticeship levy has the potential to revolutionise the future workforce, giving employers greater ownership and control of apprenticeship programmes to help boost skills, as well as creating training opportunities that better suit the diverse needs of all young people.
By Emma O’Dell, Head of Financial Services apprenticeships and strategic partnerships at BPP Professional Education