The Department for Education released its long awaited guidance for Apprenticeship funding in England last week. This new information gives employers more certainty around the levy, enabling workforce development and budget planning.
The funding changes are part of a wide arc of apprenticeship reforms designed to give employers more control over designing, choosing and paying for apprenticeship training.
- Do I need to pay the levy?
The Apprenticeship Levy will be paid by employers with a pay bill of over £3 million from April 2017. Employer levy payments will be topped up by a 10% government contribution.
Employers who have a pay bill of under £3 million and do not pay the levy, but would like to train an apprentice, will be required to co-invest 10% and will benefit from government funding to cover the remaining 90% of the cost.
Employers with fewer than 50 employees will be able to train 16 to 18 year old apprentices without making a contribution to training as the government will pay 100% of the training costs.
- If you are a levy payer you can allocate your levy funds to apprenticeship training for your business.
Levy payments will be registered in an employer’s Digital Apprenticeship Service (DAS) account. Employers will access their account to allocate their funds to apprenticeship training for their business. Funds will available for a period of 24 months. After this period the funds will expire.
Funds in the DAS account can only be spent on apprenticeship training provided by a registered training provider. Employers are required to choose and negotiate the training they would like their apprentices to receive from potentially over 4000 colleges, universities and independent training providers. Some employers will choose to register as a provider themselves to self-deliver apprenticeship training.
- Employers who use up their levy funds and wish to take up more apprenticeship training will benefit from the co-funding arrangement with the government for the additional apprenticeships.
- You can use your levy funds to upskill your existing staff, and address issues such as an ageing workforce and diversity, as well as attract new talent to your business.
Employers will be able to use funds in their Digital Account, or access government co-investment support, to train any eligible individual to undertake an apprenticeship at a higher level than a qualification they already hold, including a previous apprenticeship. In addition it is proposed that employers should also be able to train individuals on an apprenticeship at the same or lower level than a qualification they already hold, if this allows the individual to acquire substantive new skills and the content of the training is materially different from any prior training or a previous apprenticeship. Further guidance on this latter point is anticipated.
- The government will provide additional financial incentives to employers who employ 16-18 yr old apprentices, 19-24 yr old apprentices who were formerly in care, or who have an Education and Health Care plan. Support will also be given to improve achievement in English and Maths where required.
JRV Associates are independent experts in providing Apprenticeship Solutions. We work with employers who wish to understand how they can develop and implement excellent Apprenticeship training programmes across their business.
For further information please contact Jenny on 07817 685711 or email [email protected]