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Caught in a levy trap

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Will marginal Apprenticeship Levy payers be considered in the new funding model?

As we eagerly await details of the operating model for the Apprenticeship Levy, promised before the end of April, much of the speculation and conversation remains focused on two main groups – those whose Levy pots will be very sizeable and how they will spend it and those who won’t be affected at all and how Apprenticeship funding will work for them.

But what about those employers who will only just be eligible to pay the Levy but whose Levy pots won’t be sizeable enough to fund the number of Apprentices they bring into their business? What will happen to them once the new system is up and running?

We have recently considered this scenario for our clients in the Accountancy sector that would find themselves in this positon. When estimating their Levy pot and the probable funding cap that a junior Accountancy Apprentice would fall into, it is concerning to see that their Levy funds would only cover one or two apprentices. This is considerably less than the number of Apprentices these employers currently recruit and there is concern about what this will mean for their school leaver intake plans. Will they be allowed to access funding from other sources to meet their demand or are they caught in a Levy trap?

We hope that those responsible for the implementation of the new system have considered this and when the details are finally released provisions will have been made for these ‘marginal Levy payers’. It would be a real shame if these employers, many of whom have for a long time punched well above their weight in terms of the number of young people they have given opportunities to, are forced to reduce their Apprenticeship recruitment plans as a result of a system that has overlooked them.

Written by Cassandra MacDonald, Head of Professional Services Apprenticeships, Kaplan

Learn more about the Apprenticeship Levy and how it may affect your business.

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