Using the apprenticeship levy

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Since its introduction, the apprenticeship levy has provided an opportunity for the NHS to significantly scale up its approach to embedding apprenticeships across organisations. On this page you’ll find some technical information about what the apprenticeship levy is, and practical information about how to use it within your organisation to support workforce priorities.

What is the apprenticeship levy?

The apprenticeship levy was introduced in April 2017 and is paid by all employers who have an annual pay bill of £3 million or more. The rate of the levy is set at 0.5 per cent of the total pay bill and is paid to HMRC through the PAYE process. Those with a pay bill of less than £3 million don’t pay the levy and use different arrangements to pay for apprenticeship training.

Levy paying employers set up an online account to access levy funds which are paid in each month. The levy funds are used to pay for the apprenticeship training costs, but not employment costs. Any funds that are not used expire 24 months after they enter the account. To help minimise this risk the funding works on a first-in, first-out basis, with payments taken from those funds that entered the account first.

Additional payments are available to help with the costs associated with supporting younger apprentices, care leavers and young adults with additional learning needs. Find out more on our Q&A page.

You can find more information about the apprenticeship levy and how it will works in our apprenticeship levy factsheet. Further guidance for both levy paying and non-levy paying employers is available on the gov.uk website.

Engaging board members

Delivering successful apprenticeship programmes requires a culture of work-based learning across the organisation. This process starts with engagement from the board, so they understand how they can utilise apprenticeships and the levy to support workforce supply planning. NHS Employers produced a briefing which contains a set of key questions for your board to consider and suggested actions to help obtain maximum benefit from the levy. Download the board briefing.

Engaging line managers

Managers and staff must understand the role they can play in making apprenticeships succeed within their teams, and the wider benefits that apprenticeships can bring to teams and departments. Find out how Greater Manchester Mental Health Trust got manager and staff buy-in for apprenticeships. 

You may wish to consider the following questions when engaging with board members and line managers:

  • How can a scaled-up apprenticeship offer act as an enabler of your workforce strategy?
  • Does your current apprenticeship offer align to the skills/talent pipeline you will need over the next five years?
  • How can the introduction/use of apprenticeships tackle your key workforce challenges?

Getting the best out of the apprenticeship levy

To gain maximum value from the levy employers in the NHS are considering where they can use apprenticeships to address significant supply challenges, improve skill mix and diversity, and develop the existing and future workforce. 

Our briefings using the apprenticeship levy and maximising your apprenticeship levy showcase examples of how trusts are gaining the most from their apprenticeship levy. These include:

  • Including apprenticeships in your workforce planning
  • Offering higher and degree level apprenticeships
  • Using apprenticeships across a range of disciplines and departments
  • Building career pathways to develop the workforce and increase diversity
  • Becoming a training provider
  • Transferring a percentage of the levy to another employer
  • Negotiating extras with training providers as part of the apprenticeship
  • Subcontracting up to £2,500 per trainee nursing associate to cover clinical placements
  • Driving the market by procuring and negotiating collaboratively
  • Working closely with procurement and finance teams.

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