Could this be the way to reverse the skills decline and increase the apprenticeship uptake by Employers

Apprenticeships have undoubtedly been impacted by Covid-19, with a Sutton Trust report stating that 36 per cent of apprentices were furloughed over the last year, 8 per cent were made redundant, and 17 per cent had their off-the-job learning suspended.

Add to that the billion-pound loss from the Apprenticeship Levy, which is never to be seen again by those employers who paid into it. It's a challenging time for young people trying to get started in their careers and for those who wish to help them.

Apprenticeships form an essential part of the UK's skilled workforce. Yet, there still appears to be a reduced appetite for recruiting apprentices, despite Rishi Sunak's efforts in rolling out a large-scale programme of financial incentives to encourage businesses to take on more apprentices as part of the post-pandemic road to recovery.

Although the costs are low for taking on new apprentices compared to employing a second or third jobber, it is still a cost, and for SME's coming out of the pandemic, more is needed for them to have the necessary support and requirements in place to aid our future talent into the workforce

This support should not only come from high-level Government. Some local authorities are leading the way, such as The West Midlands Combined Authority who are working on a strategy to encourage large companies to promote Apprenticeships by transferring their levy funds to SME's

Since the scheme's launch, they have partnered with more than 40 levy-paying employers to redirect £14 million of funds and have helped over 1,800 apprentices and 613 SMEs within the region.

Apprenticeships are essential in enhancing employability but also helping businesses to grow and sustain their workforce. Employers can identify the skills they need – for both the short term and longer term – and build the right expertise in the areas most beneficial to them.

Part of this process lies in local authorities and business communities understanding the needs and growth sectors within their region and sector, such as green and digital technologies. And ensuring that local governments, who are levy employers themselves, and large, influential businesses support SME's. One straightforward way, which will cost nothing, is for levy-paying employers to share their levy, which they will lose if it's not used.

If your company or charity has a payroll of £3m, you will be paying into your levy at 0.5% of your annual payroll. The allowance reduces the amount of Apprenticeship Levy you have to pay by £15,000 across the year. You cannot carry over any unused allowance into the next tax year.

How to transfer your levy

The Government are making it easier to transfer funds. First, both employers need to register on the apprenticeship service, then the following must be done in both accounts to complete a transfer:

  1. Connect with each other
  2. The receiving employer adds the apprentice details
  3. The levy employer confirms the transfer

Further guidance can be found here

If you are a levy employer who wants to help a key supplier train their teams to ensure you get the best service possible, for example, a key account manager. Or, if you are an SME who has a key account, perhaps ask your client if they would share their levy to train staff with your client's needs in mind. It is easy to do, and you both will be helping young people unleash their potential.



22 Jun 2021

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