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Almost a year has passed since the Apprenticeship Levy was introduced in May 2017, and with a time constraint of 24 months to spend it, time is running out.
Many businesses appear to be ‘banking’ their Levy funds in the notion that they can make a one-off payment towards the costs of Apprenticeship training at a later date. But don’t be fooled, you can’t pay the total cost of Apprenticeship training in one go using Levy funds. Payments will always be taken monthly, and you cannot make any ‘back payments’.
If you haven’t spent any of your Apprenticeship Levy, don’t panic, it’s not too late. April is the new financial year, so now is the ideal time to start planning your Apprenticeship Levy spend to make best use of your funds.
Read on to find out how you can make the most of your Levy funds before they expire and implement a successful Apprenticeship training programme for your workforce.
5 Steps to making the most of your Levy spend
Before you begin recruiting apprentices or upskilling existing employees through an Apprenticeship, take some time to review your business needs as well as your training and recruitment requirements. Identify which areas of your organisation could benefit from a skills boost and consider the ways Apprenticeship training could help you to fill these gaps.
Working with an experienced training provider can help you to make the most of your Apprenticeship Levy funds by gaining on-going professional advice and support. Regardless of your industry, a training provider can assist you by working through common processes – including setting up and managing your digital Apprenticeship account – and ensuring you gain the most value from the funds allocated to you.
Bear in mind that payments only start from the month that an Apprentice begins their training programme, so for those of you who have a backlog of funds building up in your digital account, you are likely to gain a false impression of what you can afford via your Levy funds. Apprenticeship training costs will always be debited monthly, so paying for 6 months of training in one go, isn’t an option.
Remember that Apprenticeships apply to existing employees – including graduates – as well as new employees. Levy payments can only be used to cover Apprenticeship training, and not staff salaries, so utilising the Levy to upskill your existing staff members is a great way to spend your Levy funds.
From April 2018, Levy-paying employers are able to transfer 10% of their Levy funds to other employers. This is ideal for those looking to collaborate more closely with other companies and could work wonders for those businesses unsure of how they wish to spend their Levy.
If you run out of funds in your Levy pot, what happens next? It’s called co-investment and means you are able to access additional funding in the same way as non-Levy payers. Co-investment means you’ll only pay 10% of Apprenticeship training costs to your training provider, while the government will pay the remaining 90%. Your Apprenticeship service account will let you know when your Levy funds are due to expire.
Unused Levy contributions – what happens to them?
Any Levy funds you don’t use will expire 24 months after they enter your Apprenticeship account. The account operates on a first-in, first-out basis, so whenever a payment for training is taken from your account, the service always uses the funds that entered your account first.
Any money not spent within 24 months will be removed from your account and put into the general Apprenticeship fund. Missing out on effectively using your Levy funds could mean competitors take advantage of your unused funds, as essentially, you’ll be paying for someone else’s training costs.
If you haven’t spent your funds yet, it’s not too late…
North Lancs Training Group can help you make the most of your Apprenticeship Levy. If you haven’t spent yours yet, don’t panic. We’re here to work with you, offer advice and help you to identify your skills and training needs, so you are comfortable with how you spend your Levy funds.
For more information, simply contact our Employer Engagement Team today on 01254 300779, or email: firstname.lastname@example.org
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