In April 2017 the way the government funds apprenticeships in England is changing. Some employers will be required to contribute to a new apprenticeship levy, and there will be changes to the funding for apprenticeship training for all employers.
Paul Johnson of the Skills Funding Agency gave a useful presentation outlining The Apprenticeship Levy at an Nottingham Trent University breakfast event. Here are some of the key points. You can also read Paul Johnson's presentation.
Rationale for the Reforms
- Simplicity: Simplifying apprenticeship standards so that they are shorter and more accessible.
- Employer driven: Employers designing apprenticeships to make them more responsive to their needs and the future economy, and controlling funding.
- Quality: Improving the quality of apprenticeships so that they are viewed with the same esteem as University
Main elements of the reform
- Employer-led Trailblazers designing apprenticeships: Giving employers the opportunity to set the skills, knowledge and behaviours you need.
- Short, concise standards replace long, complex frameworks: Providing a clear and attractive ‘shop window’ for parents, apprentices and businesses.
- All apprenticeships have an end point assessment and include grading: Ensuring that apprentices are signed off as fully competent at the end of their apprenticeship.
- All apprenticeships must last at least 12 months: Continuing to drive up the quality of apprenticeships.
- Give employers greater control over funding: Enabling employers to be intelligent customers, getting the training they want and driving up quality.
- Employers in the driving seat.
- Job role specific.
- Simplified apprenticeship standards.
- Increased quality of apprenticeships.
- Recognition for apprentices who demonstrate high level performance.
- Increased flexibility for training delivery.
Funding Apprenticeships – The levy
- The minimum wage for apprentices has been increased by over 20% to £3.30 in October 2015.
- The Government is introducing a levy on employers to fund apprenticeships. This will be collected through PAYE.
- Employers who pay the levy and are committed to apprenticeship training will be able to get out more than they pay in.
- Employers will be able to choose where to direct the funds in their digital account. Where employers choose not to, we will make these available more widely.
- The levy will be set at 0.5% of an employers pay bill. It will only be paid on any pay bills in excess of £3m.
- Employers will have an allowance of £15,000 to offset against their levy payments.
Digital Apprenticeship Service
From April 2017, the new Digital Apprenticeship Service will provide a new simple online portal for employers to manage their apprenticeships. Whether you pay the levy or not, the digital apprenticeship service will help you to:
Select an apprenticeship framework or standard.
- Choose the training provider or providers you want to deliver the training.
- Choose an assessment organisation.
- Post apprenticeship vacancies.
From April 2017, if you pay the levy you will also be able to:
- See the funds you have available to spend in England.
- Set the price you've agreed with your training provider.
- Pay for apprenticeship training and assessment through the digital apprenticeship service.
More information on the new levy can be found on the Government's website.