Apprenticeships offer the chance to earn as you learn, developing and learning skills in a role. This is gained by a mixture of learning on the job (and in the workplace), formal training with a local provider and of course the experience gained in the role itself.

Apprenticeships have been shown to bring benefits to both employers and employees:

  • 86% of employers say apprenticeships helped them to develop skills relevant to their organisation.
  • 78% say apprenticeships improve productivity.
  • They have also been shown to improve employee satisfaction, reduce staff turnover and reduce recruitment costs.

How it works

Apprentices are required to spend at least 20% of their time off the job on training (this varies however depending on the requirements of the apprentice, for example if they need additional training in English and maths). This is decided by the apprentice and the employer.

In addition, on the job training allows the apprentice to develop skills for the role whilst supported by a mentor.

Who can apply?

Anyone over the age of 16 and not in full time education. They can be new recruits or current employees who want to develop and progress on the job. The apprenticeship must last for at least 12 months.


The Apprenticeship Levy

In April 2017 the government introduced the Apprenticeship Levy which requires all employers with a salary bill of more than £3 million per year to pay into the fund. Those with a wage bill of less than £3m are not required to pay into the fund, but benefit from at least 95% of the training and assessment costs paid for. Employers in this bracket are asked to pay a 5% contribution towards the cost (which is paid direct to the provider).

Employer obligations

Firstly, the employer must have a genuine job available with a contract which is long enough for the apprentice to complete their apprenticeship. The employer is responsible for paying the apprentice’s wages and to ensure they have selected and engaged a training provider.

The first step for the employer is to find the training provider (see the government’s list of registered providers). A total price needs to be agreed for the cost of the training and the assessment. For an apprenticeship standard, this also has to include the cost of the end-point assessment which must be agreed with a provider selected from the government’s list.

Documents to have in place include:

  • An apprenticeship agreement.
  • A commitment statement signed by the apprentice, the employer and the provider.
  • For levy paying employers, a contract for services with the main provider.

Levy-paying employers also need to:

  • Ensure the apprenticeship is in place for at least one year.
  • Pay the apprentice the correct wage for their age, for the time they are in work, in off the job training and doing further study.

Costs

Non-levy paying employers pay 5% towards the cost of training and assessing an apprentice. The government will pay the rest up to the funding band maximum. The training provider is paid directly and a payment schedule is agreed.

If you employ fewer than 50 employees then the government will pay 100% of the costs of apprenticeship training.

Employers with a wage bill of more than £3 million are required to pay the apprenticeship levy. Funds are managed using the apprenticeship service and can be spent on training and assessing apprentices.

The government will apply a 10% top up to the funds in the account.

If are not enough funds, the employer pays 5% of the outstanding balance and the government will pay the rest. This is up to the funding band maximum allocated to each specific apprenticeship.

Funding and support available (as of August 2020)

When you hire new apprentices between 1 August 2020 and 31 January 2021, you can apply for extra funding.

For apprentices aged:

  • 16 to 24, you’ll receive £2,000
  • 25 and over, you’ll receive £1,500

The payment is in addition to the existing £1,000 you’ll already get for taking on an apprentice who is:

  • aged 16 to 18 years old
  • under 25 and has an education, health and care plan or has been in the care of their local authority

Find out more here.

What is the Kickstart Scheme?

The scheme was announced during the Summer Statement and aims to fund work placements for 16 – 24-year olds who are at risk of long-term unemployment or receiving universal credit. Read our full guide for more.

Where next?

The government has an online service to help getting started and manage the process.

You can also visit the government’s apprenticeship site as a source of information.

Get in touch for a free 15 min consultation

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