Housing People The social housing training and development forum Apprenticeship Levy Christian Spence Head of Research & Policy Greater Manchester Chamber of Commerce www.gmchamber.co.uk/research

Apprenticeship Levy What is the Apprenticeship Levy? What is it? Will you pay? How much will it cost? Why has it been introduced? Productivity crisis, employers lack of human capital investment What are the implications for employers? How do you draw down funding? What happens if I don’t pay the levy? Are there any risks? Will it work? Will employers engage? Will it support the workforce? Questions & Answers www.gmchamber.co.uk/research

Apprenticeship Levy What is the Apprenticeship Levy? Announced at Summer Budget 2015 It is a Levy on employers to fund new apprenticeships The Levy will be charged at a rate of 0.5% of an employer’s total pay bill wages, bonuses, commissions, pensions contributions it is not charged on benefits in kind (company cars, health insurance, childcare, etc.) Each employer will receive an allowance of £15,000 Only employers with total pay bill of >£3m p.a. will be charged The Levy will be introduced from 6 April 2017 www.gmchamber.co.uk/research

Apprenticeship Levy Why has it been introduced? “Our apprenticeship levy will boost our economic productivity, increase our skills base and give millions a leg up on the ladder of opportunity - over 90% of apprentices currently go into work or further training. Making Britain a world leader on apprenticeships is essential if we truly want a country that works for everyone.” Robert Halfon Skills Minister www.gmchamber.co.uk/research

Labour Market QES Recruitment Source: GMCC QES Q3 2016 Source: GMCC QES Q3 2016

Labour Market QES Recruitment & Investment in Training Source: GMCC QES Q3 2016 Source: GMCC QES Q3 2016

Apprenticeship Levy What are the implications for employers? For all employers: Levy administered by HMRC as part of RTI PAYE system First payment by 22 May for April payroll For Levy payers: Total funds in employer’s digital apprenticeship service account are: Employer’s calculated Levy (0.5% of Total Pay Bill - £15,000) Government top-up (10% of employer’s contributions) Funds in digital account expire after 24 months (was 18 months) Ability to transfer up to 10% of funds in digital account to other employers in the supply chain, sector or ATAs from April 2018 If an employer spends their annual allocation, government will co-invest additional apprenticeships by 90% www.gmchamber.co.uk/research

Apprenticeship Levy What are the implications for employers? For non-Levy payers: The digital service will be available from 2018 and fully by 2020 (but co-investment and new funding bands begin in April 2017) Government will co-invest 90% of training of assessment costs www.gmchamber.co.uk/research

Apprenticeship Levy How does the system work? All apprenticeship standards and frameworks (to be phased out by 2020) are allocated to one of 15 bands These have different upper limits, ranging from £1,500 to £27,000 The upper limit caps the maximum amount of digital funds a levy payer can use towards an apprenticeship Also caps the amount that government will co-invest Employers can negotiate with training providers and assessors on price Register of accredited training providers and assessors to be created www.gmchamber.co.uk/research

Apprenticeship Levy Are there any risks? 90% co-funding is very generous Likelihood of employers negotiating on cost is low Last decade has seen a large increase in volume, but High numbers of level 2s Focused on over-25s With accreditation of existing skills more common than upskilling Focus has to be relentless on quality and value-add to the employer and the apprentice www.gmchamber.co.uk/research

Apprenticeship Levy www.gmchamber.co.uk/research

Housing People The social housing training and development forum Any Questions? Christian Spence | Head of Research & Policy Greater Manchester Chamber of Commerce christian.spence@gmchamber.co.uk | @GMCCResearch www.gmchamber.co.uk/research