CMI urges employers to embrace new Apprenticeship Levy

06 April 2017 -

Some 98% of UK firms will now have the majority of their apprenticeship funding costs covered by government

Matt Scott

The government’s new Apprenticeship Levy comes into force today in a radical shake up of the way apprenticeships are funded – from today, 98% of employers will have 90% of their training costs met.

The levy will apply to companies with a payroll of £3m or above, and will equate to 0.5% of employers’ PAYE bills paid on a monthly basis, with a £15,000 allowance cancelling out the levy for smaller employers.

Those that do pay the levy will have a 10% top-up added to their funding pot by government as an extra incentive to help them maximise their return from the funding.

CMI director of strategy and external affairs Petra Wilton said: “The Apprenticeship Levy is a huge opportunity for employers to invest in the skills needed to lead and grow a competitive workforce. With economic uncertainty ahead, employers need to invest in management capabilities now more than ever to lead change and engage their employees.

“Businesses disputing the need for a levy should realise that the true tax on jobs is the low productivity of managers already in the workplace, costing £84bn per year according to research by Investors in People. Investment to upskill and bring on the next generation of managers through higher level and degree apprenticeships will be more than repaid by the productivity gains they deliver.”

CMI has developed a number of apprenticeships that employers can benefit from, most recently being given the government green light to develop master’s apprenticeships for senior leaders.

The apprenticeship will be designed by employers to develop the skill sets of those working in private, public and not-for-for-profit sectors with responsibility for directing the operations of companies or third sector organisations, government departments or local authorities, and formulating national and local government policy.

This new apprenticeship will be developed by a group of more than 30 employers led by Serco and Civil Service Learning, and supported by CMI.

It adds to the Chartered Manager Degree Apprenticeship, which was launched in November 2015, and the team leader and operational manager apprenticeships launched in June 2016, providing a progression route for employers to invest in managers at all levels.

Here to help: Find out more about CMI’s apprenticeships

And Wilton urged employers to take advantage of the benefits of the levy to bolster their apprenticeship schemes and invest in the future leadership of their organisations.

“It’s vital that employers are fully supported to develop home-grown talent through high-quality trailblazer apprenticeships,” she said. “Already, we’re seeing both major employers and SMEs adopt the new Chartered Manager Degree Apprenticeship and invest in professional management apprenticeships from Team Leader Level 3 through to the new Master’s degree apprenticeships being developed.

“Education providers and professional bodies are playing a key role in working with employers to show the business benefits of these new apprenticeships and meeting the skills that employers most need.”

Grasp a Unique Opportunity

The government is empowering employers to take the first step towards the future of how the UK does business. Use CMI’s Levy Calculator to see how much your organisation could benefit from the introduction of the apprenticeship levy.