Big firms urged to grasp 10% levy move

Apprenticeship provider Develop Training has welcomed news that large employers are now able to transfer their levy funds to other organisations.

But the company cautioned that firms will have to manage the process well to maximise the potential business benefits. It also warned that the move is adding more complexity to a system that many employers have had difficulty in understanding.

From May, large employers who pay the Apprenticeship Levy will for the first time be allowed to transfer up to 10% of their annual funds to other organisations. It means firms can use some of their unspent levy funding, which would otherwise go to the exchequer, to support smaller employers to take on apprentices.

Chris Wood, CEO of Develop Training, said: “There are potential business benefits for larger businesses to support firms in their supply chain to take on apprentices. I would recommend working with your chosen supplier and an apprenticeship provider to align the scheme with your own training programmes and to focus the money where it will benefit you both the most. You should be aware that apprenticeships can cover management training as well as the kind of trade-based training traditionally associated with apprenticeships.”

He added: “Putting some thought and effort into this process will pay dividends all round, for the large employer, the supply chain business and the apprentices who go through the scheme. As with everything to do with the levy, it makes sense to get expert help and advice from specialists such as ourselves.”

Initially, firms will only be able to transfer funds to one organisation. After user feedback from the first phase, they will likely be allowed to split their 10% funding into several smaller payments across multiple organisations.

The Education and Skills Funding Agency has advised those transferring the funds to be aware of “the funding rules around transferring apprenticeship funds, which will be published at a later date”. Once a transfer is made, it cannot be refunded.

Apart from their own supply chain, levy-paying employers who want to transfer funds can find companies who want money for apprenticeships in a number of ways. These include making contact with an approved Apprenticeship Training Agency such as Develop Training or working with regional partners.

After Develop Training’s Industry Skills Forum in November revealed concerns among major employers about the levy, it has been offering advice on the levy process and guidance about the kinds of training that can be provided under the scheme.