10 May 2021
For a breakdown of what an apprenticeship is, how it works, and how to utilise them in your business, download our free guide here.
What are they?
Apprenticeships are a method of training individuals. They are usually used within a skilled profession, whilst undertaking work at the same time. They are often perceived as a way into employment for younger people. However, apprenticeships are open to all who are aged over 16.
The government encourages organisations to use apprentices as a method of creating a skilled workforce.
In Scotland, apprenticeships are run under a contract of apprenticeship. This is similar to a contract of employment, including the rights afforded by one. However, it’s specialised for an apprentice. It will state how long the apprenticeship is expected to last and the training that will be provided.
In England and Wales, apprenticeships are run under an apprentice agreement.
There are two types of apprenticeship agreement (old style and new style). This is due to the phasing out of apprenticeship ‘frameworks’ and the introduction of apprenticeship ‘standards’. The agreements structure the apprenticeship slightly differently in relation to the training you need to offer.
The old style is still used in Wales and in some areas of England where a standard has not yet been created to replace the framework. However, frameworks are no longer available for new starters in England from 31 July 2020.
Off-the job training
Certain apprentices must receive off-the-job training, including those who are:
- Working towards both apprenticeship frameworks
- Working towards apprenticeship standard
- Under a contract of apprenticeship in Scotland
The duration of off-the-job training must be a minimum of 20% of the duration of the apprenticeship. You can provide this training at your place of work—it doesn’t need to be done off-site.
The apprenticeship levy
What is it?
The levy has been set up by the government to encourage more companies to take on apprentices. Here’s how it works:
If you have an annual payroll bill of at least £3 million you must pay the levy. This amounts to 0.5% of your payroll per month, which you pay to the HMRC. They place this into a digital account. All companies falling into this category can then apply for access to their digital account. You can then use this to pay for apprenticeships.
Funds in this account expire and are paid to the Government if not used within two years of being paid into the account.
Looking to the future
New incentive payments
As a result of the pandemic, the government made plans to encourage the creation of new opportunities. These plans include providing incentive payments to employers taking on new members of staff.
For new apprentices aged 16 to 24, taken on between 1 August 2020 and 31 March 2021, the government will provide the employer £2,000. For those aged 25 and over, this is £1,500. However, for all new apprentices taken on between 1 April and 30 September 2021, the government will provide the employer £3,000.
The incentive is paid in two instalments. Eligibility for the first comes if the apprentice remains employed for 90 days. Eligibility for the second comes if they remain employed for 365 days.
The Department for Education (DfE) has launched a consultation on a new operating framework for flexi-job apprenticeship schemes. Specifically, they want to increase the use of apprenticeships in certain sectors and professions. The consultation document and accompanying survey are open for comments until 1 June 2021.
The aim is to develop portable apprenticeships. This means 'putting apprentices in the driving seat' and enabling them to move between employers. There is a particular focus on industries where short-term contracts are the norm during apprenticeships. The Government sees flexi-job apprenticeships as a means to overcome the barriers of traditional apprenticeships.
However, prior to launching a £7 million fund in July 2021, it wants to explore the different way such models could operate. It also wants to seek views on how flexi-job apprenticeship schemes can achieve its ambition for long-term financial sustainability. This fund should help identify the improvements needed to the previous Apprenticeship Training Agency model.
Stay posted with all the latest updates on the consultation and apprenticeships in general with Croner…
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