March 4, 2019

Paying the apprenticeship levy? Time to realise the benefit

The government’s flagship training fund for employers has had little uptake. That means employers are missing an opportunity to develop staff using the training fund they are already paying into.  Are you paying into the fund without realizing the benefit?

Facts and Figures

More than three quarters of levy-paying employers are yet to take on any apprentices or upskill existing employees via the apprenticeship scheme. That means 80% of eligible organisations are paying the levy without reaping the benefit of boosting workforce capabilities through apprenticeships.

HM Revenue and Customs has confirmed, in response to freedom of information requests from the Open University, that 53,449 employers have paid into the levy fund.

Furthermore, figures from the Education and Skills Funding Agency show that only a fraction of the total funds paid by levy-paying employers have been spent – just 14%.

Organisations don’t have long left to spend their initial funds – until May this year. At the moment, employers can backdate funds to April 2017 when the levy was introduced. Otherwise, funds can be backdated for a maximum of 24 months. Any funds that aren’t used however, expire 24 months after they have entered an organisation’s accounts.

From May, the Treasury will start reclaiming any unspent levy funds on a monthly basis.

Any employer who has a wage bill of over £3 million a year is eligible to pay the levy. But rather than thinking of it as a training tax, employers need to think of it as a training fund. It’s an opportunity for employers to both bring in new hires and train them up, or up-skill their existing workforce.

How should I take advantage of the Levy?

At DPG, we now offer four apprenticeships in HR and Leadership & Management – HR Support Level 3 Apprenticeship Standard, HR Consultant/Partner Level 5 Apprenticeship Standard, Learning & Development Practitioner Level 3 Apprenticeship Programme and Learning & Development Manager Level 5 Apprenticeship Programme. We urge all employers to use the money to upskill their workforce and help plug any skills gaps.

Please note that the HR qualifications that appear on this page will be replaced in 2021. For more information on this change please read the CIPD’s announcement here.