4th March 2019
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What is a levy?
A levy is a tax that is imposed on an individual or business.
From now on, any employer with an annual pay bill (total earnings) of over £3 million must pay an apprenticeship levy.
The apprenticeship levy is charged at a rate of 0.5% of their annual pay bill.
How does it work?
Although the levy rate is 0.5%, each employer is given an annual £15,000 allowance to offset against this.
Also, they do not need to pay the 0.5% if they dedicate it to apprenticeships.
Any money that is paid to the government is put into a pot of money for smaller businesses – those who offer apprenticeships to 16 to 18 year olds will receive 100% of the training cost from the Government (and 90% for apprentices aged 19 and over). Non-levy businesses with less than 50 employees will also receive a £1,000 incentive for taking on an apprentice aged 16-18.
This essentially means that both large and small businesses now have a very strong incentive to take on more apprentices.
How will this affect me?
This is both good and bad news for anyone considering an apprenticeship – on the one hand, the number of apprenticeships available to you, especially if you’re aged 16-18, is likely to increase over the next few years. This means that you’re far more likely to find an apprenticeship that is the right fit for you.
On the other hand, there are concerns that these new incentives are causing some employers to ‘cash in’ on the scheme whilst providing poor training. More than 2,500 organisations registered as training providers following the levy’s introduction, many of them employers spending their funding on in-house ‘training’ services, despite having no previous experience with education training. Even established training providers, such as Learndirect, have had their government funding pulled due to ‘inadequate’ training.
What can I do to make sure I receive good training?
Firstly, you’re not alone – it’s recently been announced that Ofsted, the government body responsible for assessing the quality of education providers, has been given extra funding – this will help them to carry out more inspections in the face of the growing number of apprenticeship providers.
This is great news, as once Ofsted have completed their report, it’s available to anyone to see. You can even view a training provider’s Ofsted rating on your Unifrog Apprenticeship Shortlist, and then click on the link to view the full report. There are four levels in total: Inadequate, Satisfactory, Good and Outstanding.
On your Unifrog Apprenticeship Longlist, you can also rank your list by the percentage of students or employers who recommend that training provider, which is based on annual data released by the Department for Business Innovation and Skills.
We’ve put together this handy checklist to help you apply for apprenticeships with good prospects:
- Check the Ofsted report – aim for training providers that are classified as ‘Good’ or ‘Outstanding’
- Consider ranking your Apprenticeship Longlist by ‘% student recommend’ or ‘% employers recommend’
- Search for the employer on glassdoor and read the reviews – many of them will be written by employees rather than apprentices, but it will help you get an overall feel for the company
- Ask the employer about the percentage of their apprentices that go on to secure full-time employment or further training
- Make sure the apprenticeship you’re applying for will award you recognized qualifications that you actually need in order to progress your career. It’s very possible, for example, to leave college and gain full-time employment as a business administration assistant (and a salary to match), without first completing an apprenticeship in business administration.
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