Changes to the Apprenticeship Levy

Hattie / 28th Oct, 2016 / News

Apprenticeship levy – boring but quite important.

This week, the government gave in to pressure from employers to make some concessions on the planned apprenticeship levy.

As part of the plan to create 3 million apprenticeships by 2020, from April next year, larger employers – those with payrolls of £3million and above – will have to pay a tax in order to fund apprenticeships. The government reckons it will raise £2.5 billion which will be ring fenced to fund apprenticeships.

Nobody like paying taxes, especially if you don’t know how your money’s being spent. But, at least in this case, you do. And employers will ultimately get their money’s worth when they can draw down vouchers from the levy to fund apprenticeships.

Firms who will have to pay the levy make up only about 2 percent of businesses in England. 98 percent of companies are much smaller and the levy represents a case of the big players being forced to subsidise the smaller ones.

What’s not to like?

Business critics of the levy scheme claimed it would be inflexible. Colleges said that amendments announced during the summer recess would have seen cuts of up to 50 percent for apprenticeships for the poorest teenagers.

Businesses were also concerned that a demand that they spend their vouchers within 18 months did not fit with their existing recruitment and training cycles.

So, the latest changes include:

  • an extra 20% of funding to train 16 to 18-year-olds
  • more money for employers to train apprentices in the poorest parts of England
  • more money for employers who take on apprentices under 24 years old who are in care or who have special educational needs
  • 24 months for businesses to spend the vouchers.



Good news all round, then? 

Good news all round, then?

Sort of. While the politicians, colleges and employers hammer out the fine details, it is largely good news for school leavers and young people who want to take up apprenticeships. It’ll also give some encouragement to smaller companies to start looking at how to employ apprentices. It probably won’t be good news for universities competing for the share of school leavers – but then it might bring up standards at universities.

apprenticeship levy

A last word of caution from Uni’s not for me

While it’s great news that the government appears genuinely committed to creating more apprenticeships, Uni’s not for me hopes that their quality – and that of the apprenticeship providers – doesn’t diminish.

You only have to look what’s happened in universities as successive policies have encouraged more and more people to go. In the rush to get paying bums on seats, Universities have had to lower their standards meaning employers are faced with a pool of graduates with worthless degrees and a completely false sense of their own employability. Or, they can take on school leavers as apprentices and train up their own workforce. We just don’t want to see any exploitation on that front.

Want to know more?

There’s loads of information online for apprentices and employers – the official government site is here.


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