What Would a Rating Apprenticeship Cost My Company?
Employing and training a rating needn’t cost as much as you think. In fact it may even cost you as little as between £10,000 to £15,000 a year! This relates to recognised programmes on formal government approved apprenticeships. Of course there are other benefits that in the long run may be more useful for you for example investing in a workforce and helping the local community. You are also investing in the wider maritime sector. A strong UK seafarer population provides core students for UK Maritime Colleges and Training Centres and thus facilitates the ability to attract foreign students, a valuable income stream for the UK. British domiciled seafarers provide an essential domestic resource required to populate UK’s Maritime Industries and thus maintain UK’s position as the major maritime shipping centre in the World. UK resident seafarers provide a valuable foreign income stream to the UK Treasury.
There are bursaries and other incentives you can benefit from. Below are some costs and financial information that you can use to work out your own costs and to help you decide on employing an apprentice. You can check the apprenticeships currently available by clicking here for apprenticeships in England and by clicking here for Scottish Modern Apprenticeships.
Apprenticeship salaries are set by the government at a basic level, through the Minimum Wage, below which employers cannot go, but employers are free to pay as much above that basic level. See here. Currently minimum wages can be roughly said to be:
The minimum salary for year 1 apprentice (under age 19 or in first year of apprenticeship) is:
The minimum salary for year 2 apprentice is at National Minimum Wage:
In practice, most shipping companies are paying more, preferring to pay a competitive rate in order to attract a motivated and committed crew.
This will be dependent on the specific apprenticeship programme and the college/training organisation providing the apprenticeship, including whether it is run in England or Scotland, as the funding regimes are different.
The following example is based on the Able Seafarer (deck) trailblazer apprenticeship and based on a £9,000 “funding band” which is the maximum government funding in England for the costs of training. Each Trailblazer apprenticeship is allotted a funding band upon approval, if you are paying the apprenticeship Levy you will pay the provider from your levy and negotiate that cost. If you are not paying the Levy you will pay your contribution to your training provider over the lifetime of the apprenticeship. Under the terms of the Autumn Budget, October 2018, small employers’ co-investment rate for apprenticeship training is to be cut from 10% to 5% the changes come into force in April.
Possible additional Costs
Sending an apprentice to study at a college may mean travel and accommodation costs, depending on how the programme is arranged. MNTB is always looking to identify typical costs as a guide for new employers. This could be around the costs outlined below:
- Accommodation for college training
- Transport to the college
- Food and resources whilst at Sea
Here is an attachment that allows you to look at some of the associated costs and is based on data from a number of different companies and averaged out from our findings. You are welcome to download this document for your own use because the second tab will allow you keep a record of costs with your own apprentices and wider seafarers. Apprentice Annual Budget Costs
There are several funding streams available to help support apprenticeship training costs. These are:
- Government funding for non-levy payers 90% of the indicative funding band for apprenticeship training
- Government funding for Apprentices aged 16-18 or subject to a health or care plan – up to £1,000
- Maritime Educational Foundation (MEF) Bursary – £4,000. (You can claim £2,000 when the apprentice is registered on the programme with the college/training provider and £2,000 when they complete.)
Employers do not pay national insurance contributions for apprentices under 25 registered on a government approved apprenticeship. So if you pay an apprentice £12,000 pa, that’s a saving of £493. You can see the rules here