Following the announcement from the Government (on 12th August 2016) that the Apprenticeship Levy will be implemented next year, Jill Whittaker, Managing Director of HIT Training – the largest supplier of training and apprenticeships in the Hospitality Industry – breaks down some of the key points hospitality businesses need to know:
“After months of speculation around whether the Apprenticeship Levy would go ahead, we can now finally put this to bed. The Apprenticeship Levy will be implemented from April 2017.
“What this means is that the time to start planning is now. If you know you’re a Levy paying business – that’s most businesses with a UK payroll in excess of £3m – start by working out how much your monthly Levy payments will be and then look at how you can use these funds to make an apprenticeship scheme work for your business.
“The recent announcement from the Government sets out how it will continue to support and fund apprenticeships, and what the investment from employers will be. Whilst there is a lot of detail in the new report, these are the key points operators need to be aware of:
- The Levy will be paid on payroll from April 2017, so the first Levy payment for employers will be in May. Employers will then be able to purchase training, with a registered training provider, through a new digital system.
- Levy employers will pay 0.5% of their payroll over £3m on a monthly basis. The Government will also top up the funds by 10%.
- The Levy can be used to fund apprenticeships for new or existing employees of any age or position, as long as there is a need for training. If employers wish to spend more on apprenticeships than their Levy fund, then they will be asked to make 10% a contribution from May onwards.
- Each apprenticeship framework will have a maximum funding band and the Government has set 15 different bands. Employers can then negotiate an appropriate price with their training provider – for many larger businesses, if the employer has a training department they may be able to make the Levy go further by offsetting some of their own training input.
- Non-Levy paying businesses with over 50 employees, or businesses that have used up their levy pot, will have to make a contribution of 10% towards the cost of apprenticeships. Smaller businesses will not have to make a contribution for apprentices up to the age of 23.
- For all employers which take on an apprentice between 16 and 18 years old, they will receive £1,000 bonus payment from the Government.
“This is effectively a game changer in the way apprenticeships are administrated and will give employers more influence and flexibility when it comes to the qualifications they offer. Love it or loathe it, it is now a reality. Yes, it will be a big financial investment for many businesses, but used judiciously it will offer a great opportunity for employers to up-skill their whole team, from new starters right thought to senior management. Approved hospitality apprenticeship programmes are available from entry to higher levels, and will soon go right the way through to degree equivalent. More standards are being developed now, including a plan for a suite of apprenticeships specifically designed for licenced operators. If we work with the new system we can use it to address the much publicised skills shortage that affects the Hospitality Industry – this must be a good thing.”
For more information on the Apprenticeship Levy and advice on how to prepare, please visit https://hittraining.co.uk/apprenticeship-levy or call HIT Training on 0800 093 5892.