Government publishes new guidance on the apprenticeship levy

The government has released further guidance on the apprenticeship levy, providing a clearer understanding of how it will be funded, and the role employers and training providers will play.

From 6 April 2017, all UK employers that have an annual pay bill of over £3 million will be required to pay an apprenticeship levy to invest in apprenticeships. The funding will support people of all ages to gain high-quality skills and experience and help employers to offer more training opportunities and build a skilled workforce.

Here are the key points from the proposals today:

  • Employers that are too small to pay the levy will have to pay 10% of the training costs, with the remaining 90% paid by the government.
  • Employers with less than 50 employees will not have to pay towards the training costs of 16 to 18-year-old apprentices, which will be 100% met by the government.
  • Employers who take on a 16 to 18-year-old apprentice will receive an additional £1,000.
  • Employers and training providers who take on 16 to 18-year-olds or young care leavers with an education, health and care (EHC) plan will receive additional funding.
  • Employers will be able to use levy funds to retrain workers in new skills, even if they have prior qualifications.
  • Employers subject to the apprenticeship levy, who want to spend more on training than is in their digital account, will see 90% of their additional apprenticeship training costs funded by the government.
  • From April 2017, a register of training providers will be available to improve the link between training providers and employers. The proposed funding system will consist of 15 bands, each with an upper limit and which will range from £1,500 to £27,000. 50% of each apprenticeship programme must be delivered by a training provider.
  • Employers who are also training providers will be subject to Ofsted regulations.
  • Providers who have an Ofsted rating of grade 4 will be unable to provide apprenticeships.
  • Apprenticeship providers will no longer be rewarded with a double payment for each apprenticeship start.
  • The success payment (paid upon successful completion of an apprenticeship) will be replaced with a 20% completion payment, regardless of the final grade.
  • Apprenticeships will be available to everybody over the age of 16 at all levels.
  • Training providers who have apprentices enrolled on programmes that do not receive approval on the new register of apprentice assessment organisations will have their learners transferred to another provider. This is currently under consultation.

To help employers see how the levy and funding system would impact them, the government has also created a new online calculator.  This easy-to-use tool will allow employers to understand how much they will have to pay and how they could use their digital funds to pay for future training.

A consultation on the plans is now open, and will close on 5 September 2016. Employers and training providers are invited to have their say on the initial funding proposals to try to ensure that the final plans fully meet the needs of all those involved in the apprenticeship programme.

The final proposal on the apprenticeship levy is due to be confirmed in October 2016.

 

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