Has the levy caused a drop in Apprenticeship numbers?

At the end of November, the BBC reported that Apprenticeship numbers have dropped by 59% since the introduction of the levy earlier on this year.

Susanne Davies, Marketing Manager at North Warwickshire and South Leicestershire College discusses what this could mean for Apprenticeships going forward.

What is the levy?

“The Apprenticeships levy is a tax that supports the government’s pledge to create three million Apprenticeships starts by 2020.

“It applies to all employers in England in both private and public sectors but only those who have an annual PAYE bill of £3 million or more pay into the levy.”

Why the drop?

“Many have suggested the ‘increased costs and complexities,’ associated with the new scheme have contributed towards the drop (guardian.co.uk). Others have argued that many firms have been put off hiring more apprentices due to having to pay 10% of their off-site training fees whereas previously many would have received this free of charge (bbc.co.uk).

“The DfE did however expect an initial drop following the introduction. This was mainly due to levy-paying employers having 24 months to spend their funds therefore many may still be deciding what to do with them.”

What does this mean going forward?

“Whether this drop continues remains to be seen. If the DfE are correct, we can expect to see an uplift over the next year. Perhaps a ‘settling down’ period is required whilst employers and training providers get used to the new rules and procedures.

In the meantime, we are working closely with local businesses, both levy and non-levy payers, to ensure they can make the most of Apprenticeship funding available.

To find out more about Apprenticeships, contact the College’s Business Development Team: business.development@nwhc.ac.uk 024 7624 3000