Changes to the apprenticeship funding system
In 2017 the government made changes to the way apprenticeship funding works, including:
- introducing the apprenticeship levy
- introducing the apprenticeship service – this is an online service that allows employers to choose and pay for apprenticeship training more easily
- introducing a new ‘co-investment’ rate to support employers who don’t pay the levy (‘co-investment’ is when employers and government share the cost of training and assessing apprentices)
The apprenticeship levy
If you’re an employer with a pay bill over £3 million each year, you are required to pay the apprenticeship levy from 6 April 2017.
You will report and pay your levy to HMRC through the PAYE process.
The levy will not affect the way you fund training for apprentices who started an apprenticeship programme before 1 May 2017. You’ll need to carry on funding training for these apprentices under the terms and conditions that were in place at the time the apprenticeship started.
As a levy-paying employer you will set up a digital apprenticeship account where you’re levy contributions will be stored. You can’t use funds in your account to pay for other costs associated with your apprentices (such as wages, statutory licences to practise, travel and subsidiary costs, work placement programmes or the setting up of an apprenticeship programme).
Changes for employers who don’t pay the levy
Support with apprenticeship costs
Non-levy paying employers will share the cost of training and assessing their apprentices with government – this is called ‘co-investment’.
From May 2017, you will pay 10% towards to the cost of apprenticeship training and government will pay the rest (90%), up to the funding band maximum.
Managing apprenticeship training and assessment
There are 2 different types of apprenticeships to choose from:
- apprenticeship standards – each standard covers a specific occupation and sets out the core skills, knowledge and behaviours an apprentice will need; they are developed by employer groups known as ‘trailblazers’
- apprenticeship frameworks – a series of work-related vocational and professional qualifications, with workplace- and classroom-based training
To choose training: