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Apprenticeship Levy

The Apprenticeship Levy will come in to force in April. While, in the first instance, the Levy will only financially impact businesses with a minimum £3 million payroll, smaller businesses are eligible to benefit from the new scheme. Jill Whittaker, Managing Director, HIT Training explains why the new Levy is good news both for apprentices and employers.

The Apprenticeship Levy is a Government initiative to fund three million places for apprentices by 2020. Before it has even been implemented, the Levy has generated a spirited debate among employers, with some seeing it as a welcome step to help plug the skills gap and others viewing it as enforced legislation leaving little time to prepare.

One thing is for sure – the Levy completely changes the way in which apprenticeships are administered and will impact businesses of all sizes. If your company falls below the £3million payroll threshold (as 98% of businesses will) you can still take advantage of the new funding – here’s how.

Opportunities for SMEs

Even though smaller businesses (which are under the £3million payroll threshold) will not be required to pay into the Apprenticeship Levy fund, they will be able to draw from it to train new apprentices and up-skill existing members of staff. In practical terms, this means that:

  • Non-levy paying businesses will pay 10% of apprenticeship training costs with the Government co-investing the remaining 90%
  • Employers with fewer than 50 employees who take on 16-18-year-old apprentices, or 19-24-year-olds who have an education and healthcare plan, will not need to pay anything, with 100% of training costs being covered by the Government
  • There will be an extra monetary supplement available for recruiting younger apprentices aged between 16-18 or 19-24 with an education and healthcare plan
  • Increased amounts of funding will be available for apprentices who come from the most deprived areas of the country. This provision will be in place for the first 12 months, when it will then be reviewed
  • For those already employing apprentices, anyone accepted before 1 May 2017 will be funded for the full duration under the terms and conditions that were in place when that particular scheme started
  • Apprenticeship funding under the Levy will begin from 1 May 2017. All previous schemes will no longer be available for new enrolments.

Under the new process, apprenticeships will need to be administrated by a registered and accredited training provider. There will be a new digital service that will help you to select an apprenticeship, choose training providers and assessment organisations, as well as post your apprenticeship vacancies. Unlike larger levy-paying businesses, SMEs will not need to use the digital apprenticeship service (DAS) to pay for apprenticeship training and assessment until at least 2018, when further advice will be issued by the Government.

Choosing the right training provider

Female chefThere will be many employers implementing an apprenticeship scheme for the first time, who have never worked with a training provider before and are just as confused about the process of choosing one as they are about the Levy itself. If you are feeling this way, do not worry, there are some simple ways to make sure you get it right.

Finding the right training partner to suit the individual needs of your business is fundamental to the success of your apprenticeship programme and there are a number of criteria to consider before making your final choice. Here are a few tips to provide a good starting point for your research:

  • Look at a training provider’s completion rates for the sector and the subject that suits your business – such as professional cookery. Information can be found by searching all registered training providers on the government website www.gov.uk/topic/further-education-skills/apprenticeships
  • Just like schools and colleges, all training providers with government contracts are subject to regular Ofsted inspections. These will provide an independent opinion on the effectiveness of leadership and management within the training provider and the quality of their teaching, learning and assessment. These reports are available online at www.gov.uk/government/organisations/ofsted
  • Market research company Ipsos Mori regularly compiles learner and employer satisfaction scores on behalf of the Government. These capture the experiences of the training and are indicators of what you can expect from the provider
  • It is imperative to make sure your training provider is financially secure to minimise the risk of the company going out of business part way through an apprenticeship. All training providers go through an accreditation process to join the approved register of apprenticeship providers and this includes a financial check
  • If your business has outlets across the country, finding a training provider with the ability to deliver apprenticeships in each of these locations will help to deliver a consistent quality of training across your business. Multi-site employers can make the whole process easier by working with just one specialist training provider and one point of contact.

The Levy puts the control of apprenticeships into the hands of the employer and offers significant flexibility when it comes to how they are delivered, which has to be a good thing. In the lead up to April 2017, when the Apprenticeship Levy comes into play, understanding what to look for in a provider will ultimately help to determine the success of apprenticeships across your business.

The opportunities for training staff within the professional catering sector are widespread, there are now even options for seasonal staff to take a break from training and resume when they come back to work for the next season. The hospitality sector is growing and with the help of apprenticeship programmes, we can all work together to develop the long-term skills needed for a successful future.

HIT Training is the largest provider of training and apprenticeships for the Hospitality and Catering Industry. The company offers a huge range of work-based apprenticeships, compliance and development schemes for people at all levels, from school-leavers to senior management. For more information, visit: www.hittraining.co.uk

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