By Fiona Baldwin
Practice Leader
Grant Thornton Northampton
IN April 2017, the government launched the apprenticeship levy to encourage businesses to invest in training new and existing employees. Yet despite this incentive, the number of new apprenticeships started in August to October last year fell by 25 per cent compared to the same period in 2016, suggesting many firms are failing to take advantage of the scheme.
Part of the reason could be down to confusion about the levy. A recent survey by the British Chambers of Commerce revealed just under a quarter (23 per cent) of businesses paying the levy don’t understand how the scheme works. As a result, 66 per cent of those questioned said they haven’t taken any action to make use of it.
So how does the levy work? Any organisation with a wage bill of over £3million (approx. two per cent of UK businesses) has to pay the annual 0.5 per cent tax on payroll. This money is paid into individual Digital Apprenticeship Scheme (DAS) accounts, with government providing an additional 10 per cent top up. Businesses can then spend the money accrued on approved apprenticeship training and assessment for both new and existing employees.
Here in the Northamptonshire, businesses are thriving but one of the challenges they face, highlighted in our 2017 Northamptonshire Limited study, was a lack of available talent to support growth. This is a theme which is likely to be reiterated in our upcoming 2018 report in May and has been echoed in other parts of the UK.
The apprenticeship levy provides an opportunity for firms to address this talent gap by upskilling the next generation at a relatively low cost. Creating new and relevant training opportunities can also help to incentivise employees and encourage staff retention.
Apprenticeships and training play a crucial role in helping businesses thrive. Talented people, with a desire and determination to learn, hold the key to boosting growth in Northamptonshire so all firms should consider how they could use the apprenticeship levy to their advantage.
In an increasingly competitive market, businesses who invest in developing future leaders will be the ones that succeed.
Find out more at www.grant-thornton.co.uk