The Apprenticeship Levy
Apprenticeship Changes and How They Will Affect You
Apprenticeship delivery across England is changing from May 2017 and these changes will have a direct impact on you, the employer, and how you fund and support your apprentice moving forward.
From May 2017, both the way that apprenticeships are funded and the content of apprenticeship courses, will change. Below we have set out information that will help you navigate through these changes and help you to make an informed decision.
The information here should be considered a starting point and the apprenticeship team here at Newton Rigg College will be only too pleased to help you with any further information or advice that you may need.
Apprenticeship Funding and the Employers Levy
One of the biggest changes is the introduction of the employers levy and the way that apprenticeships are funded. Previously, all the funding allocations has been placed with the training provider and it has been their role to ensure that the correct funding has been drawn down for each candidate. With the reforms, the employer is very much at the centre of the changes and this includes placing the funding directly with the employer.
Not only do employers now have the option to choose who they wish to deliver the training for them, but they are also responsible for ensuring that the correct funding is accessed and transferred to the training provider.
The Government is doubling the level of spending on Apprenticeships by 2019-20 in cash terms, as part of the reforms, and will be introducing an Apprenticeship Levy from April 2017. This will affect all employers and will depend on the size of the organisation as to which levy model they use.
a) Employers with a pay bill over £3 million per annum
If an employer has a payroll bill in excess of £3million per annum. The Levy rate will be 0.5% of the employer pay bill and will be collected through Pay As You Earn (PAYE). The government will pay a 10% top-up for your apprenticeship training funds each month, meaning that for every £1 that enters your account for spending on apprenticeship training, you’ll get £1.10.
b) Employers with a pay bill less than £3 million per annum
There will also be changes to funding for apprenticeship training for employers whose payroll bill is less than £3m a year – the majority of UK business. When the new funding system starts, you can you can continue to train apprentices and choose the appropriate standard or framework Approved Training Provider.
You will agree a price for the apprenticeship with the training provider and will be able to spread it over the lifetime of the apprenticeship. Employers will be asked to make a contribution to the cost of this training and the government will pay the rest, up to the maximum amount of government funding available for that apprenticeship. As both you and the government make a payment, we call this ‘co-investment’.
The government has confirmed it will pay 90% towards the cost of training and assessment, and employers will pay the remaining 10%.
Apprenticeship Standards Banding
Every individual apprenticeship framework and standard will be allocated to a funding band. The upper limit of the funding band will cap the maximum price that government will ‘co-invest’ towards. The new apprenticeship funding system will have 15 funding bands, with the upper limit of these bands ranging from £1,500 to £27,000. All existing and new apprenticeship frameworks and standards will be placed within one of these funding bands.
Digital Apprenticeship Service (DAS)
A new Digital Apprenticeship Service is being created which will allow employers to open online accounts so that they can directly access apprenticeship funding. This digital system will allow employers to:
• search for relevant standards/frameworks to match their job roles
• search for providers who deliver
• advertise their vacancy
• receive applications from people interested in the role
• claim the money to pay/support the delivery of the apprenticeship programme.
This is going to be a complicated process to begin with. To help you, we have provided links to the relevant pages where you can access more information.
1. Digital Apprenticeship Service
The government is introducing and Employers Digital Apprenticeship Service (DAS) to help employers manage their levy payments. To help you understand the changes, click on the video below.
2. Set up your Digital Service Account
To help set up your Apprenticeship Service account and to access the relevant government web pages. Click here
3. Your Levy Credit
To help calculate your levy credit and identify the correct levy model for you and your organisation visit www.fas.report
Estimate your apprenticeship funding spend through the Skills Funding Agency. Click Here
Apprenticeship funding: How it will work and how to pay your levy. Click here
The latest HMRC guidance on Apprenticeship reforms is available. Click here
For More Information...
To help you understand the changes to apprenticeships and how they will affect you and your organisation, please come along to one of our apprenticeship events being organised throughout the year or contact a member of the apprenticeship team:
Tel: Wayne Roberts 01768 893400 or 07970 748744