IGA News

Apprenticeship Funding - Final Details Announced

Apprenticeship Funding - Final Details Announced

31 October 2016

In spring 2017 the way the government funds apprenticeships in England is changing. This will make it easier for employers of all sizes to choose the apprenticeship training they want to purchase by moving away from the current provider-led model, meaning training providers will have to be much more responsive to what employers need. This should lead to higher quality training for apprentices.

The levy will be paid by employers with a pay bill of over £3 million from April 2017, which means small businesses won’t have to contribute anything to the levy.

The Department for Education have now published their final apprenticeship funding policy. Any apprenticeships starting from 1 May 2017 will be funded according to the new rules. This will apply to all employers, both those paying the levy and those who do not.

The new document provides details on how the policy has been adapted following feedback from their initial proposals in April and August, which you can read through here.

Here are the key features of the final apprenticeship funding policy that will be relevant to small businesses:

  • 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

The Department for Education now have a comprehensive guide to the new levy online, which you can read here.

There’s nothing you need to do at this time, but we will let you know how to use the digital apprenticeship service (to pay for apprenticeship training and assessments) when the information becomes available.