How to use your apprenticeship levy – developing an effective strategy

The apprenticeship levy is a fund that can be invested straight back into your business. But are you planning your levy spend to maximise its value and impact?

It's an opportunity to shape, upskill and invest in your workforce, using funds that your business builds up over time. You might already be using some of the levy, wondering how best to spend it or haven’t even touched it yet.

Whatever your situation is, Lifetime has the tools, techniques and multi-sector insight to mobilise this fund across your whole business to unlock its potential. We’re experts at optimising levy spend and minimising expiration, working with some of the UK’s largest employers to optimise their fund to generate maximum business benefit. Here’s how we build effective strategies to make it happen.

Unspent apprenticeship levy

Recent reports have shown that on average, employers are only spending around 47% of their levy. It’s a surprising figure, given that the apprenticeship levy is a fund that employers have already paid into, ready to be spent. It suggests that employers aren’t using their apprenticeship levy, aren’t planning to maximise it or are happy to miss out on investing it.

What happens to unused apprenticeship levy?

It’s a use it or lose it situation. Employers have up to 24 months to spend the levy before it goes into HMRC’s pocket. So, whether it’s the full amount or only a percentage of it, an unused levy is ultimately a missed opportunity.

The levy is cash that could be put directly back into your business to level up your people – and there are endless benefits for employers. Experienced training providers can help you capitalise on the pot you’ve already built up and avoid expiring funds.

At Lifetime, we make levy optimisation simple. We do the heavy lifting, unravelling complexities for our partners while working together to develop their strategy. Whether you’re just starting to use the levy for existing employees or are looking for opportunities to increase your spend, we can make maximising your fund easier.

Creating an apprenticeship levy strategy

Every business has different reasons for doing apprenticeships. Our job is to uncover yours. It’s why at the very start of our partnerships, we run strategy workshops. They’re collaborative, blue-sky thinking sessions, designed to find out how your levy can be used more effectively.

It’s all about getting to know you, your business and finding out what’s important to you. It’s essential for developing a robust strategy, but also establishing how we’ll seamlessly embed your programme within your business.

We start by taking things back to basics. Together, we’ll look at your current state of affairs, identify your key motivators for apprenticeships and the benefits they’ll bring to your business.

We’ll ask all the important questions to strategically uncover what your programme’s success looks like – what are your core business principles? Your aspirations and priorities for your provision? And, if you already have a programme, what’s its history? How does it work with internal training? We want to know what’s working well for you, but also your sticking points.

To show the art of the possible, we’ll bring our best practice. We'll explore case studies of employers we’ve worked with that share similarities with you. What made their apprenticeship stories a success, and how we can replicate it in your business to level up your offering?

Using your apprenticeship levy strategically

Now we understand your business, your current situation and future direction, we have the fundamentals for building an ambitious strategy that optimises your levy.

We’ll bring your strategy to life, mapping it to your unique goals to create the most impact for your business that goes beyond your requirements. Where is the real need for apprenticeships? Where are the skills gaps within your teams? How can we really start to see a ROI?

After establishing your mission statement, core principles and success measures for driving your strategy forward, we’ll show you how we’ll make it happen. Lifetime will create a step-by-step plan of how we’re going to turn your strategy into action – and how we’re prioritising different parts of your programme.

We’ll plan your programme launch, our cultural onboarding and how we’ll integrate apprenticeships within your existing training offer. We’ll support the roll-out of communications by boosting engagement internally and externally, and create bespoke marketing collateral that reflects your brand, cultures and values, so the programme really feels like your own.

The Lifetime Levy Calculator: our forecasting tool

We've built your strategy and are confident in how we’re driving it forward – now we need to see how it works in practice. This is where Lifetime’s Levy Calculator comes in. It’s our unique tool that helps us to calculate your apprenticeship levy, but also models what your strategy actually looks like and what we’re going to achieve together.

It’s how we plan, manage and monitor your apprenticeship spend, so we know you’re always fully optimising it, forecasting for the future and reducing expiration. We break down your levy into the finite details to leverage your strategy, but also create a 3-5-year plan so we’re sure you’re consistently investing in your people.

Ultimately, it’s a holistic view of your entire programme (even including programmes we don’t deliver). How much levy do you have and how much can you spend? What can we start with? And what should we do to move forward? Depending on the level of detail you need, we can also track NI payments and incentive payments you could receive, showcasing all the financial information you need.

With this tool, we do monthly reporting on levy spend and status, so we're always one step ahead as your programme evolves. It’s also how we evidence that we’re on track to meet your goals, show how smoothly your programme is running and review and adjust the strategy to meet your preferences and needs.

Measuring the success of your apprenticeship programme

So, you’ve consistently been putting the levy back into your business to invest in your people – you'll want to know it’s working. How can you report progress back to the rest of the business?

IKEA uses apprenticeships to upskill its leaders across its UK sites. We’ve worked together to develop a strategy that’s harnessed every opportunity to capitalise its levy, creating IKEA’s first leadership and management apprenticeship programme, Stepping Up. It’s flourished, with a 96% engagement rate and 86% success rate that develops, grows and empowers its future talent.

A switch to purely external training means Nuffield Health now optimises its levy. The move has not only driven a real breadth of programmes, but switching to external apprenticeship training has seen an impressive 304% increase in learners and it no longer expires any of its levy funds. Here’s how we’re aligning apprenticeships to its latest strategy, The Big Build.

Working with Lifetime

Looking to unlock the potential of your apprenticeship levy? From your entry-level teams to your leaders, we can optimise your levy to open up opportunities for all your people, at all levels. Find out what it's like working with us.

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