But what has happened since its introduction?
Here, we explore the impact the levy has had on the business world so far. Higher level starts, there was an almost immediate trend towards higher level starts in apprenticeships (level 4-7), with many sectors facing an increased demand for more advanced skills. Indeed, larger businesses have used the levy to either substitute or complement their existing higher-level training (like graduate schemes).
Higher level starts
There was an almost immediate trend towards higher level starts in apprenticeships (level 4-7), with many sectors facing an increased demand for more advanced skills. Indeed, larger businesses have used the levy to either substitute or complement their existing higher-level training (like graduate schemes).
Generally speaking though, the higher level the apprenticeship, the higher the cost – which isn’t so easy for SMEs to fund. What’s more, whilst this does result in a stronger level of apprentices, overall it means that less individuals are being trained. There was a reduction in lower level apprenticeships too, which are typically taken up by people under the age of 25 and/or from socially disadvantaged backgrounds.
Levy paying vs non-levy paying
Businesses have been found to be more likely to use the levy if they are a levy-paying organisation. Those with an annual pay bill of at least £3m contribute to the apprenticeship levy – to the tune of 0.5% of their pay bill surplus to this threshold. It makes sense, then, that they’re more likely to take advantage of it. As a result, many levy payers view the initiative as a positive. Ultimately, it provides them with a funding pot specifically for apprenticeship standards, which can be used to train their existing workforce and people new to their role. However, smaller businesses who don’t contribute to the levy still have to pay 5% of the apprenticeship funding band.
Other impact factors
COVID-19 of course had an effect, with an estimated 14% drop in apprenticeship starts for new hires. Whilst apprenticeship recruitment didn’t see much impact initially as hiring decisions had already been made, it’s expected that the pandemic will have knock-on consequences later down the line.
s expected, apprenticeships related to leisure, retail, travel and tourism, and commercial enterprise have seen a decline. The government has brought in financial incentives to encourage take up, the effects of which we again expect in due course.
Employers are now able to choose from a wide range of apprenticeship standards, across all job roles, and select from the broadened spectrum of skill-specific providers who are approved by and registered with the register of apprenticeship training providers (RoATP).
How BMS Progress has improved apprenticeship training
Here at BMS Progress, we’re not just listed on the RoATP – we’ve flipped apprenticeships on their head. When the levy came into action, we saw the opportunity to evolve our training proposition. Now, we enable every individual to take control of their own continuous development – no matter their age, budget, or size of their business. Through us, you can expect professional, ESFA- and Ofsted-compliant training that translates to real results for your business. Whether you need help upskilling team leaders or boosting your sales performance, our blended programmes are ideal.
From interactive workshops to one-to-one coaching and eLearning content, our apprenticeship training is making waves in the industry. That’s why we’ve received such positive feedback from learners and employers alike.
Discover more about what our apprenticeships could do for you, your business, and your team. Improve performance, progress careers with BMS Progress.