The government has announced the official launch of its apprenticeship levy to ensure employers and learners get the skills they need.
The introduction of the levy is the biggest shake-up of skills for a generation and further supports the government’s commitment to deliver 3 million apprenticeships by 2020 – there were a record 900,000 apprentices last year.
Originally announced by former Chancellor George Osborne the levy aims to increase bigger business contribution to UK apprenticeships, whilst also supporting smaller businesses in their apprenticeship training.
“There has never been a more important time for Britain to invest in the skills of our people and businesses,” said Skills Minister Robert Halfon.
“To make Britain stronger and fairer, we need to make sure that everyone gets the chance to climb the ladder of opportunity to gain the education and skills they need to be successful in life.
“Our apprenticeship levy is a massive part of this. More than 90% of apprentices go into work or further training, and the quality on-the-job training on offer will make sure we have the people with the skills, knowledge and technical excellence to drive our country forward.
“Building an apprenticeship and skills nation is essential in ensuring that we have the home-grown workforce we need in post-Brexit Britain to address the skills shortages facing industry and give everyone the chance to succeed.”
The levy will require all employers in the UK with an annual wage bill of over £3 million to pay 0.5% of it towards funding apprenticeships.
The money will be invested in quality training for apprentices and double the annual investment in apprenticeships in England to £2.5 billion by 2019 to 2020, compared with 2010 to 2011 levels.
Employers in England can set up an online account to manage their funds and invest in training for apprentices working for them – currently around 100 accounts are being set up every day.
The government will then provide a further 10% top up to levy contributions each month into employers’ accounts.
The levy will encourage employers to invest in high-quality apprenticeships ensuring even more people have a chance to reach their full potential.
Support will also be provided for smaller employers with an annual pay bill below £3 million and therefore not required to pay the levy. The government will pay 90% of the costs of training and assessing their apprentices.
In addition, companies with fewer than 50 employees that take on apprentices aged between 16 and 18 will have 100% of their training costs paid for.
This is on top of a range of support for apprentices who have additional needs, including around £60 million of funds towards training those from the poorest parts of England
In addition to the levy, the Institute for Apprenticeships was also launched this week.
Independent from government, the institute, which is to be chaired by Antony Jenkins, has been launched to ensure that all apprenticeships are top quality and deliver the skills that employers need.