How the apprenticeship levy will affect your business

26 August 2016 -


Employers are facing a rapidly changing landscape when it comes to apprenticeships, but CMI’s latest webinar breaks down the changes to the regulations and lets you know what it means for your business

Matt Scott

The latest government reforms around apprenticeships are changing the way the qualifications are perceived and how they are developing careers and boosting businesses.

Apprenticeships are no longer the reserve of younger workers, with the removal of an age-cap and the introduction of the Apprenticeship Levy opening the door for many more British managers to benefit from enrolling on an apprenticeship scheme.

CMI head of apprenticeships Alison Cox said these changes to the way apprenticeships are being delivered presents opportunities to a wide range of workers at different seniority levels and empowers employers to design schemes that work for them.

“We are now moving to a point where apprenticeships are very much about a specific organisational role,” she said. “We are seeing it as an opportunity to encourage young people into a career and to very much see it as career development and, excitingly, promote it for the mid-career development it can present, to train up and develop [existing] members of staff and help them progress forward in their careers.

“These apprenticeships are a new way for employers across the country to look at what their managers need to be able to do, and how they can look to develop individuals, whether they are new to the organisation or existing staff, in order to develop them into truly competent professional managers.”

“These fundamental reforms have put employers in the driving seat,” she added.

A new way of funding

The introduction of the Apprenticeship Levy from 6 April 2017 is also changing the way apprenticeships are funded, with 98% of employers having 90% of their training costs met.

The levy will apply to companies with a payroll of £3m or above, and will equate to 0.5% of employers’ PAYE bills paid on a monthly basis, with a £15,000 allowance cancelling out the levy for smaller employers.

“Those that do pay the levy will have a 10% top-up added to their funding pot by government as an extra incentive to help them maximise their return from the funding,” Cox added.

The benefits of apprenticeships

CMI research has found that every £1 invested in apprenticeships, results in an £18 benefit for the wider economy, something Cox describes as a ‘massive return on that £1 in terms of how competitive and productive are country is’.

The research also found that for individual companies, apprenticeships can deliver productivity benefits of £214 a week, and 71% of workers that complete an apprenticeship end up staying with the same employer.

“The loyalty and the return [from investing in apprenticeships] is a long-term commitment by the apprentice to the employer,” Cox said. “And we know that the majority (70%) of employers say that having an apprentice in their organisation fundamentally improves quality and service.”

Want to find out more about how apprentices can benefit your business? Watch the full CMI webinar and the changes to the apprenticeship landscape here

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