Despite coming into effect in April 2017, latest reports show employers have accessed less than 10% of the ring-fenced apprenticeship budget.
2018 apprenticeship starts are down 40% on 2017 and the government’s manifesto target of three million starts by 2020 looks under threat.
What is the apprenticeship levy?
Designed to encourage employers to invest in training, the levy is charged at a rate of 0.5% on an employer’s paybill if the paybill exceeds £3 million. Employers receive an allowance of £15,000 to offset against their levy payment and have two years to claim this back by spending it on apprenticeships. Non-levy paying employers (which account for 98% of UK businesses) can ‘co-invest’ in apprenticeships, paying 10% towards the cost of apprenticeship training with the government paying the rest (90%).