It’s now been a over year since the Apprenticeship Levy launched. Despite many people criticising the system over the year, are businesses finally on board with the initiative?

In this guide, we’ll give you an overview of everything that’s happened with the Levy so far, and how we can overcome any challenges for the year ahead. 

Complex system 

The Apprenticeship Service Account has been labelled as complex and inflexible for many businesses using their funds. With organisations struggling to get to grips with the system, there was a 60 per cent drop in apprenticeship starts from May to July last year. 

The hard-to-navigate system was acknowledge by Chancellor Philip Hammond in his spring statement: 

“We recognise the challenges the new system presents to some small business looking to employ an apprentice. I can therefore announce today that the education secretary will release up to £80 million of funding to support small businesses in engaging apprentices.” 

This funding is to help SMEs find their way through the system to then hopefully recruit apprentices in a more organised fashion. If you’re still unsure on how to use the system, take a look at our illustrative guide. 

Transferring funds 

Levy payers can gift 10 per cent of their funds to other companies in their supply chain - including charities and SMEs within their industry. This was due to launch in April this year to help non-Levy payers with recruiting apprentices and upskilling staff. Since the end of April, employers who pay into the Levy are able to see their transfer allowance in their Apprenticeship Service Account. However, the first transfer payments will only be made in June this year. 

There is some guidance on the Government website around transferring funds, with the below being highlighted: 

“For the first phase, employers who have unused funds in their apprenticeship account will be able to transfer some of those funds to one other employer. The number of employers you will be able to transfer funds to will increase over time and after user feedback from the first phase.”

We’ve put together a handy guide around transferring funds to other businesses - give it a read here. 

Looking ahead 

The system gives employers 24 months to spend their Levy funds before they leave their Apprenticeship Service Account. Now that we’re way into the sunsetting process, Levy payers have less than 12 months to use their funds before they run out. In order to make sure your business doesn’t lose out, read our helpful guide here for further guidance on the sunsetting process and the time limits with funding.   

What can you actually do with your Levy? 

There is still some initial confusion over what businesses can use their Levy for and the best advice we can give, would be to speak with your training provider or if you’ve never engaged with apprentices before, visit the gov portal to view the Register of Approved Training Providers (RoATP) to find one. 

An example of how you could maximise your Levy, would be through bespoke management programmes via management standards or you could look at some of the entry-level standards like customer service practitioner or property maintenance operative to support growth, recruitment and talent acquisition. 

Over to you

While the first year of the Levy has been somewhat controversial, we anticipate next year to be more organised - with businesses able to navigate the system and learn from their experiences for the year ahead.

If you’ve got any questions or simply want to find out more - don’t hesitate to reach out to us on Twitter, LinkedIn or email.

And if you’re looking for further information about the Apprenticeship Levy, get in touch with our expert team today:  

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