On the 1st of May 2017, the way that the government funds apprenticeships in England is changing. Employers with an annual payroll of £3 million or over will be required to contribute to the new apprenticeship levy. There will also be significant changes to the funding of apprenticeships for all other smaller employers.
From the 1st of May 2017 new apprenticeship standards are launched, these will replace the existing apprenticeship frameworks. The main change to apprenticeship programmes, is that the new standards will include an end point assessment that will be carried out by an independent body at the end of the programme. This must be passed to meet the new standard and gain apprenticeship certification.
All apprenticeships that start before the 1st of May 2017 will continue to be funded under the existing funding rules until the completion of their apprenticeship programme. The larger levy paying employers will begin to pay the levy to the HMRC via their monthly payroll. These employers can then access these levy funds from the Digital Apprenticeship Service account to spend on apprenticeship training. Smaller employers below the £3 million payroll figure will be phased onto the levy programme during 2018 and 2019, according to government plans.
What happens to Non-Levy payers from the 1st of May 2017?
Smaller employers that fall outside the bounds of the levy, will be called non levy payers and will therefore be funded under the new government co-investment model.
The government will fund 90% of the cost of a co-investment apprenticeship, with the employer contributing the remaining 10% of the apprenticeship delivery cost.
However all 16-18 year olds employed by smaller employers (less than 50) will be 100% government funded, so many of our employers in our sector will not have to make a contribution.
Employer Incentives of £1000 are available for all employers who take on a 16-18 year old, this is paid to the employer in two instalments after 3 months and 12 months. All 19-24 year olds who start an apprenticeship after 01 May 2017 and have a current education and health care plan or have been in the care of the local authority will also be eligible for this incentive
Maths and English Functional Skills at levels one and two will continue to be funded by the government as part of the apprenticeship standard, however if GCSE’s are required to meet the standard, the employer will have to make a contribution towards the delivery costs.
Click here to read the latest government information about how the Apprenticeship Levy and funding will work.
Click here to view an online calculator to see how the Apprenticeship Levy and funding changes could affect your business.
Click here to access a list of the Apprenticeship Standards currently available or under development.