Apprenticeship Funding Guidance for Employers

Apprenticeships remain high on the Government’s agenda, despite everything else that is going on. The apprenticeship levy, payable by employers with annual pay bills of more than £3 million, reported here, is due to come into force in April 2017. Employers who pay the levy will be able to draw on those funds to pay towards training costs.

The Government has now issued draft proposals on how the funding of apprenticeships will work in practice. This will only apply to apprenticeships in England.

The main points to note:

  • New training funding bands will be introduced, which set the limits of training fee funding for each type of apprenticeship. There will be 15 funding bands, ranging from £1,500 to £27,000.
  • The upper limit of each funding band will cap the amount of funds an employer who pays the levy can draw on. This is for training costs of an individual apprenticeship.
  • For those employers who do not pay the levy, the cost of training will be split between them and the Government, which has been called “co-investing”. The upper limit of the funding bands will cap the amount the Government will co-invest towards, with the employer contributing 10% of the cost and the Government 90%.
  • It will be for the employer to negotiate with training providers as to the cost of the training. Anything over the designated funding band will be paid by the employer.
  • Co-investment will not apply for small employers (those with fewer than 50 employees) who train 16-18 year olds or 19-24 year old care leavers who have Local Authority Education, Health and Care plans in place. The Government will pay 100% of training costs up to the cap referred to above. There will also be additional funding support available for these groups.

The Department for Education has asked employers to complete a survey by 5th September 2016 in order to obtain views and assess the impact these proposals may have, details of which are here.

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