Government confirm final funding proposals for Apprenticeship Levy

This week the government confirmed the introduction of the apprenticeship levy from April 2017.

The levy will be payable by all UK employers that have a wage bill of more than ￡3 million. Employers will have to pay 0.5% of their pay roll costs, and these payments will be collected by HMRC from April 2017. Employers that are not eligible to pay the levy will continue to receive government support towards apprenticeship training and assessment.

Following an open consultation with employers and training providers, the government has confirmed the final funding proposals of how the apprenticeship levy will work. While much of the guidance reiterates points that were announced in August, adjustments have been made to ensure that the reforms benefit more employers, providers and apprentices.

Key features from the updated funding policy include:

• employers and training providers who take on 16 to 18-year-olds or 19 to 24-year-olds, who were in care or who have an education, health and care plan, on an apprenticeship framework or standard, will receive a ￡1,000 payment from the government
• employers will now have 24 months to spend the levy funds within their digital account before they expire, extended from the 18 months originally proposed
• higher funding bands for STEM apprenticeship frameworks; this has increased by 40% for level 2 and 80% for level 3
• non-levy paying employers will only have to contribute 10% to the cost of training and assessment, with the remaining 90% funded by the government
• employers with fewer than 50 employees who do not pay the levy will receive full government funding if they take on apprentices who are 16 to 18 years old, 19 to 24-year-old care leavers, or 19 to 24 year olds with an education, health and care plan
• a commitment to introduce the ability for employers to transfer funds within their digital account to other employers in their supply chain and sector by 2018
• training providers will also receive an additional cash payment equivalent to 20% of the funding band maximum where they train 16 to 18-year-olds on apprenticeship frameworks
• the 15 funding bands have now been confirmed, which range from ￡1, 500 to ￡27,000
• additional funding support up to ￡600 for apprentices who live in disadvantaged areas to ensure that the opportunity to undertake an apprenticeship is open to everyone, regardless of where they live, their background or family circumstances
• training providers will be able to claim a flat rate of ￡471 direct from the government if they deliver English or maths, so that all apprentices have a basic knowledge of each subject
• training providers will be able to claim up to ￡150 of additional funding on behalf of apprentices who require extra support because of a learning or other disability

To read the government document in full, please visit here.

If you are still unsure about how the levy will impact your business, or have any unanswered questions, please contact a member of the Highfield Assessment team today on [email protected]