Businesses risk losing apprenticeship levy fund

Businesses risk losing apprenticeship levy fund

New research commissioned by HIT Training has revealed that less than half of hospitality businesses have used up the majority of their Apprenticeship Levy fund, meaning thousands of pounds might be lost.

The research revealed that despite 66% of hospitality professional being aware that their Levy funding will start to expire in May 2019, only 49% have currently used most of it.

The reasons given for not using the Apprenticeship Levy funding included those taking time to ensure they are investing in a high-quality programme (37%), not having enough time to set up or extend an apprenticeship programme (22%), not understanding the legislation (18%) and not finding the right training partner to work with (18%).

“With the second anniversary of the landmark Apprenticeship Levy approaching, we wanted to understand just how aware hospitality businesses are that their Levy funding has an expiration date and to establish if they are maximising its potential,” comments Jill Whittaker, managing director of HIT Training.

“It’s really concerning that after 18 months of the legislation being in place, 40% of hospitality professionals admit they still only have a poor or very poor understanding of the Apprenticeship Levy.

“With contributions expiring after 24 months, businesses are at crunch point to start using or losing some of their funding pots. Not only will it directly benefit their own business, the hospitality industry as a whole is facing a skills shortage and so it’s more pertinent than ever for businesses to seize the opportunity to upskill their workforce, attract new talent and improve their staff retention.”

The Levy 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 apprenticeship 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%.

There are an estimated 375,000 positions to be filled across the hospitality industry.