Government have today published their latest update on the Apprenticeship Levy, due to come into practice from 6th April 2017, including their proposals on how apprenticeship funding will work for both levy-paying and non levy-paying employers.

Employers with less than £3M per annum wage bill, and thus not paying the levy, will be required to contribute 10% towards the cost of training, with government paying the remaining 90%. All existing and new apprenticeship frameworks and standards will be placed into one of 15 funding bands, with the upper limit ranging from £1,500 to £27,000. The upper limit will cap the maximum amount of digital funds a levy-paying employer can use towards an individual apprenticeship; it will also cap the maximum price that government will ‘co-invest’ towards, where an employer does not pay the levy or has insufficient digital funds remaining. It will be up to employers to negotiate prices with employers, within these funding limits. Employers will be able to agree a payment schedule with their provider and spread their payments over the lifetime of the apprenticeship.

Other announcements include:

Simpler Funding

Currently apprenticeships are funded at different rates depending on the age of the learner. Each individual framework will be allocated to a single funding band, simplifying the process for employers. The table below shows the proposed 15 funding bands:

Support for small employers

Employers with less than 50 staff who recruit/train 16-18 year old apprentices will not be required to pay the co-investment fee. This means they will not have to pay towards the cost of training. In addition, government will make an additional payment of £1000 to the employer for recruiting a 16-18 year old, paid in two equal instalments at 3 months and 12 months.

Extra support for additional learning needs

Government will make an additional payment of £1000 to employers and £1000 to training providers to help with the extra costs to support apprentices aged 16-18 and 19-24 year old care leavers/or who have an Education, Health and Care plan. This will ensure all individuals have the opportunity to benefit from an apprenticeship. Government will also pay 100% of the training costs for small employers where the apprentice is a 19-24 care leaver or has a Local Authority Education, Health and Care plan.

Support for Maths and English training and Learning Support

To help each apprentice gain a minimum standard of Level 2 in English and Maths, government will pay training providers £471 for each of these qualifications.

Where an apprentice required additional learning support as a result of conditions such as dyslexia, learning difficulties or disabilities, government will pay providers £150 a month, as per the current system.

Those employers who will not pay the levy can continue to access the current funding system until the terms change on 1st May 2017. From this date, they can look for training and search for a training provider using the tools on the digital apprenticeship service, but will not be required to use the digital apprenticeship service to pay for apprenticeship training and assessment until at least 2018.

16-24 AGE Grant

Currently, government pay a grant to small employers (less than 50 staff) to support them in taking on new apprentices aged between 16-24. The AGE Grant scheme will continue until the end of the 2016/2017 academic year i.e. 31st July 2017.

The government have also launched an online tool to help employers calculate the cost of the levy and how the funding system will work for them, which can be accessed here.