A change to the apprenticeship scheme in England was announced by the Government in the summer budget 2015. The purpose of the levy is to help the government reach its target of an additional 3 million apprenticeship starts in England by 2020. They say that employers who are committed to training will be able to get back more than they put in by training sufficient numbers of apprentices.
As we near the 6 April 2017, when the levy will come into effect, a new document about apprenticeship funding has been released.
The government have provided a tool to calculate an estimate of what you will have to pay, and the amount of funding you will receive in return for training.
The headlines outlined in the document are:
- New funding system comes into effect on 1 May 2017 for any apprenticeships started after that date(to declare liability for the levy on April’s payroll)
- 15 tiered funding bands range from £1,500 to £27,000 based on the type of apprenticeship framework, to manage the tendency of prices to creep up
- Employers will co-invest 10% of training costs, with the government paying the remaining 90%, including those who have not contributed to the levy
How will this impact on Norfolk employers?
- If you have less than 50 staff you will be able to access 100% funding for the cost of Apprenticeship Training from the Government for 16 to 18 year olds and 19 to 24 year olds who have previously been in care or have an Education, Health and Care Plan
- You will pay 10% of the cost of Apprenticeship training if you have more than 50 employees and do not have a pay bill in excess of £3m per year
- Regardless of your size, you will receive an additional £1000 funding for each apprentice you start aged 16 to 18. (£500 at 3 months and £500 at 12 months)
- Regardless of your size, you will receive an additional £1000 funding for each apprentice you start aged 19 to 24 who has previously been in care or who has an Education, Health and Care Plan. (£500 at 3 months and £500 at 12 months)
- If you have a pay-bill over £3m you will pay the levy at 0.5% of your pay bill monthly. The levy paid will be topped up by 10% and you can spend this money within 18 months on Apprenticeship training through the digital system.
- You will be able to apply to become anEmployer-provider and deliver all or some of your training directly to your staff or others.
Commenting on the funding guidance for the Apprenticeship Levy, Caroline Williams, Chief Executive of Norfolk Chamber said:
“Norfolk businesses will welcome the news that the Government will fully-fund 16-18-year-old apprentices, and that the co-investment rate for non-levy payers will be set at 10%.
“It is disappointing however that businesses will have to wait until October, just six months before the proposed implementation date of the Levy, for details of the technical rules. Indeed, the timescale seems very compressed for a complex policy that relies on a major IT set-up.
“The Government’s apprenticeship target is laudable, and businesses see them as a vital way of narrowing the skills gap. But the focus must be on high-quality apprenticeships rather than purely as a numbers game. We look forward to inputting our member views in this complex area going forward.”
In summary, the balance of the key points in the new document are:
- Small employers will not have to pay any training costs for younger apprentices (16-18)
- In December 2016, there will be further employer guidance from HMRC on how to calculate and pay the apprenticeship levy
- Graduates or others with Higher Level Qualifications can be funded to do an Apprenticeship so long as the learning is materially different to their existing qualifications
- Final funding arrangements will be announced in October 2016
- The national AGE grant will continue to be available till the end of the academic year 2016/17. As this is devolved in Norfolk and Suffolk, we assume, but it has not yet been confirmed that this will be the case for the local scheme as well. Click here for details
- A new register will be set up and all training and assessment organisations will be required to register if they want to deliver Apprenticeship training or assessment. (RoAPT). The register will initially open in October and then 4 times a year
If you are a training provider, it is proposed that:
- You will receive an additional payment to that agreed with the employer for delivery of £1000 for each 16 to 18 year old learner and each 19 to 24 year old if they have an Education, Health and Care plan or have been in care.
- You will be responsible for administering payment of the £1000 employer incentives (above) in the initial period of the new system
- You will be able to access additional funding of up to £150 per month to support learners with additional needs
- 20% of the total cost of the Apprenticeship Training will be held back until completion in the employer’s digital account to prevent overpayment in the event that the apprentice does not complete
You can read the full document here.
The Government is looking for feedback on the proposals by 5 September 2016. To have your say please click here.
