The government initiative to fund three million apprentice places by 2020 has had a mixed response, but, as Jill Whittaker, MD at HIT Training says, the funds are there for the taking and businesses are already seeing results.
For some hospitality businesses, the perceived admin involved with the government’s apprenticeship levy may have felt a little overwhelming. It’s perhaps hardly surprising that, according to a report by the Open University, £1.3b of the cash paid into the fund is yet to be claimed.
But this figure is less dramatic than it first appears; with businesses having 24 months to use levy payments, they may just be taking time to understand the scheme first. This is our experience at HIT Training. In the hospitality sector, May 2017 saw apprenticeship starts at just 25% of the same month in 2016. But by the end of 2017, that figure had increased to 80% year on year. Far from writing a scheme off in its infancy, we need time to allow new complicated legislation to bed down.
As a reminder, the levy itself requires all companies with a pay bill of more than £3m to contribute 0.5% of their payroll costs to the scheme, which they then claim back for training. This amount is then topped up by 10% from the government. Businesses with pay bills below £3m don’t pay into the fund but they still have access to government subsidies of 90% of the cost of the apprenticeship, with the employers co-paying the additional 10%.
A recent survey from People 1st showed nearly two-thirds of employers in the hospitality, travel, tourism and aviation sectors are either confident or very confident they will see a return on investment from their levy contribution. Better staff retention rates, improved skills and personal development have all been highlighted as benefits by nearly three-quarters (72%) of respondents.