PRESS RELEASE: Apprenticeship Levy Update And Have Your Say By 5 September

The government has just published proposals for a new funding model for apprenticeships and further details on the apprenticeship levy. Under the plans for the levy, the government has proposed that employers that are too small to pay the levy (a paybill of less than £3 million per year) will have 90% of the costs of training paid for by the government. Extra support - worth £2,000 per trainee - will also be available for employers and training providers that take on 16- to 18-year-old apprentices or young care leavers. Employers with fewer than 50 employees will also have 100% of training costs paid for by government if they take on these apprentices.

The government is inviting employers and training providers to have their say on the initial funding proposals, to try to ensure final plans fully meet the needs of all those involved in the apprenticeship programme.

Key proposals are:

  •      Employers which are too small to contribute to the apprenticeship levy would have 90% of the cost of apprenticeship training paid - ensuring employers of all sizes can develop the next generation of skilled workers
  • The government will pay an additional £2,000 to help 16- to 18-year-olds, young care leavers and young people with an education, health and care (EHC) plan, make their first step into the world of work - with £1,000 going to employers and an additional £1,000 to training providers. Furthermore, employers with fewer than 50 employees will not have to pay anything towards the cost of training a 16- to 18-year-old apprentice, young care leaver or young person with an EHC plan
  • Employers will be able to use levy funds to retrain workers in new skills, even if they have prior qualifications - giving them the freedom to make the training decisions that are right for them so they can train any individual to start an apprenticeship, as long as it is significantly different from their previous qualifications
  • Levy-paying employers - those with a pay bill of over £3 million that want to spend more on training than is in their digital account - will benefit from government support with 90% of their additional apprenticeship training costs being funded, so they can continue to recruit and retrain highly-skilled employees
  • Employers will have the power to determine exactly what training their apprentices receive and what provider they receive it from. A new register of training providers will be introduced from April 2017 to improve the link between training providers and employers to will help employers identify a high-quality provider.

Employers and training providers now have the chance to feedback on the proposals for apprenticeship funding. You can respond by completing this survey by 5 September. Final funding proposals will be confirmed in October 2016.Please copy HAE EHA into your responses as this will help us to identify further issues to raise with government on behalf of the hire sector. If there are issues you would like HAE EHA to include in our own response, please email mark.bradshaw@hae.org.uk

The government has created a newonline calculator. The simple to use tool will enable employers to understand how much levy they will pay and how they could use their digital funds to pay for training in future.

The proposed apprenticeship funding system will be made up of 15 bands, each with an upper limit ranging from £1,500 to £27,000. The upper limit of each funding band will cap the maximum amount of digital funds an employer who pays the levy can use towards an individual apprenticeship or that the government will co-invest. All existing and new apprenticeship frameworks and standards will be placed within one of these funding bands and it will be up to employers to negotiate prices with providers.

For members also within scope of the CITB levy, a transition arrangement has been agreed with government for 2017/18 to allow for consensus discussions to take place on the future of the CITB Levy and how it is spent. HAE EHA is working with other Federations and attends regular cross-sector meetings with CITB.

The consultation papers can be found at: https://www.gov.uk/government/publications/apprenticeships-proposals-for-funding-from-may-2017