Government outlines apprenticeship funding plans

The Government is moving forward with plans to introduce a new levy on the large businesses to help fund apprenticeships from April 2017, according to the latest consultation on the proposals.

Only companies with a wage bill of £3 million or more will be liable for the levy, at a rate of 0.5 per cent of payroll.

It is understood that the levy will help fund ‘digital accounts’ from which employers will be able to fund apprenticeship training.

Meanwhile, small and medium sized businesses, along with large companies who wish to include additional apprentice, over and above the levy set aside in their account, will have 90 per cent of the costs of training paid for by the Government.

For businesses taking on apprentices aged between 16 and 18 and young care leavers, additional support will be made available. In addition, the Government will fully fund apprentice training for businesses with fewer than 50 employees.

The apprenticeship funding system could be made up of 15 bands, each with an upper limit ranging from £1,500 to £27,000. All existing and new apprenticeship frameworks and standards will be assigned to one of these bands.

The upper limit of each funding band will cap the maximum amount of funding that a levy-paying employer can use towards an individual apprenticeship, or that a non-levy paying employer will be able to access from the government.

Lara Murray, an employment law expert with Palmers, said: “The Government’s proposals will apply to employers in England only as Scotland, Wales and Northern Ireland have their own funding schemes for apprentices. If a business operates cross-border, funding will be available through the English scheme if the apprentice’s workplace is in England.”

“Any business owner considering offering apprenticeships, should also take the opportunity to double check that their workplace contracts and policies are fully up to date so that they reflect the latest employment legislation.”

A new register of training providers will be ready for use from April 2017 so that employers can identify a high-quality training provider that best meets their needs. Under the new scheme, employers will also have the power to decide exactly what training their apprentices receive and which provider they receive it from.

The levy will apply across all fields of business, including those that already have industry-specific levy-funded apprenticeship training programmes in place. The Construction Industry Trading Board (CITB) has already agreed a transition package for those employers due to pay both levies ahead of formal proposals for reform anticipated shortly.

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