Apprenticeship Reforms

Apprenticeship ReformsThe government has just released an update to their apprenticeship reform plans, including final levels of funding for new framework and standards starts from 1 May 2017.

The new apprenticeship levy, which applies to all UK employers, is being introduced in April 2017.  The levy will be set at 0.5% of pay bill but only employers with a pay bill of more than £3 million will have to pay it.  Employers that are not eligible to pay the levy will continue to receive government support towards the costs of apprenticeship training and assessment.

The levy applies to all UK employers but apprenticeship funding policy is devolved. The Devolved Administrations will decide how they use their levy income.  The government statement sets out how they will fund apprenticeships in England.

The way apprenticeships are funded is also being reformed, with a new dedicated Register of Approved Apprenticeship Training Providers (details also published today) and an employer-led Institute for Apprenticeships.

Key features of the final funding policy are:

  • Higher funding for STEM apprenticeship frameworks and higher pricing of apprenticeship standards;
  • Longer period of time for employers to spend funds in their digital account, now with 24 months before they expire, an increase from the original proposal of 18 months;
  • A commitment to introducing the ability for employers to transfer digital funds to other employers in their supply chains, sector or to Apprenticeship Training Agencies in 2018, with a new employer group including the Confederation of British Industry, Federation of Small Businesses, British Chambers of Commerce, Charity Finance Group and EEF – the Manufacturers’ Organisation;
  • 90% contribution from government to the cost of training for employers that will not pay the levy;
  • 100% contribution from government to the cost of training for small employers that will not pay the levy and who 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 and Health Care Plan;
  • £1,000 each from government to employers and training providers when they take on 16 to 18 year olds, 19 to 24 year olds who were in care or who have an Education and Health Care Plan;
  • Help for training providers to adapt to the new, simpler funding model through an additional cash payment equal to 20% of the funding band maximum where they train 16 to 18 year olds on frameworks; and
  • A simplified version of the current system of support for people from disadvantaged areas.