The Apprenticeship Levy UK government initiative

The Apprenticeship Levy

Ben Rowland from Arch Apprentices provides comment on the apprenticeships levy in the UK

The apprenticeship levy has brought many changes to the world of apprenticeships in the last year. Its introduction in April 2017 has caused a major shift in how apprenticeships are delivered and assessed – and even who an apprentice can be. Employers and training providers alike have had to quickly adapt to these changes – but at Arch Apprentices, we feel that this can only be positive.

What is the levy?

The Apprenticeship Levy is a UK government initiative introduced to encourage employers to hire apprentices, aiming towards their target of 3 million apprentices by 2020. Employers with an annual pay bill of more than £3 million, minus the offset £15,000 payable to HM Revenue & Customs (HMRC), are required to pay 0.5% into a levy pot. The funds in this pot are then transferred into vouchers only redeemable for the training of apprentices.

For employers with a pay bill of less than £3 million, they are required to pay 10% of the apprenticeship funding, with the government covering the remaining 90%. Where a 16-18-year old is hired, the government also offer grants to outweigh the cost of training.

What have been the impacts?

The levy has achieved its goal of bringing apprenticeships front of mind for most employers within England, as large companies debate the benefits and challenges of using their levy funds against the cost of losing them.

At Arch Apprentices, we have seen a huge demand from these employers asking for our support in developing apprenticeship schemes and internal processes to ensure that these funds are being used. Many are seeing this as an opportunity for improving their learning and development programmes and are encouraging a culture of lifelong learning within their organisation.

This has been proven to improve staff satisfaction and retention, with a report by Association of Accounting Technicians (AAT) finding that offering training and opportunities for personal development makes employees feel valued and more likely to stay much more than a promotion.

And this is not limited to young people. The introduction of the levy has also resulted in a relaxation of the strict rules around who can be an apprentice. Previously, funding was unavailable for apprentices over the age of 24 and only half available for those 19-24 years old meaning that the majority of apprentice were between 16-18.

Now, there are no funding restrictions applied, opening the doors for people of all ages to study an apprenticeship. This has meant that companies can put their existing staff onto an apprenticeship and convert current training programmes. As such, this has led to a rise in higher and degree level apprenticeships.

Further to this, the UK government have also brought in reforms to the apprenticeship programmes, scrapping the old frameworks and replacing them with standards. Standards are more rigorous than frameworks and include an endpoint assessment, which is a final assessment and evaluation of the apprentice’s learning.

Arch Apprentices have welcomed the change to standards, as we feel that these are a major improvement in apprenticeship training and prepare young people for actual jobs. Ben Rowland, Co-founder of Arch Apprentices says: “Everyone at Arch is excited by and has embraced, standards – we genuinely believe they are a step better than frameworks.”

This is because they are developed through employer trailblazer groups, who work together to create programmes that map to actual jobs and the needs of the employer. As such, apprenticeships are being developed to address the skills needs of the workplace.

Ben Rowland continues: “The Apprenticeship Levy has brought many challenges in its first year, but it also offers opportunities for businesses to prosper as a result. With the improvement of learning and development within a company and chance to plug a growing skills gap, the levy brings a chance to rejuvenate and advance the talent currently present in the English workforce.”

Ben Rowland


Arch Apprentices

Tel: +44 (0)203 906 7170



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