The Apprenticeship Levy and Furness College
What is the Apprenticeship Levy?
In spring 2017 the way the government funds apprenticeships in England is changing. Some employers will be required to contribute to a new apprenticeship levy, and there will be changes to the funding for apprenticeship training for all employers. Large employers will be required to contribute to the apprenticeship levy and funds to pay for apprenticeship training will be accessed through a digital account system. The levy will help to support quality training, and employers who are committed to training will be able to get more out than they pay in.
With this changing landscape around apprenticeships and qualifications – and the government creating 3 million apprenticeships by 2020 – it’s important you seek out professional help to understand what the changes could mean for you. There are significant opportunities for companies to ‘grow their own’ skilled workforce and it’s a great time to invest in apprenticeships. Here at Furness College we have a dedicated Business and Employment Support Team who will be happy come and visit you to talk about the support we can provide.
Who will pay the Levy?
Employers with a pay bill in excess of £3million will pay the levy from April 2017 charged at a rate of 0.5 per cent of the entire pay bill.
Those with a pay bill of less than £3million won’t pay anything, but will still be able to access funds to pay for apprenticeship training.
All employers will receive an allowance of £15,000 in each tax year, which means the levy will only be payable on the pay bill in excess of £3million per annum.
Your pay bill will be based on the total amount of earnings subject to Class 1 secondary national insurance contributions (NICs).
Employers will calculate, report and pay the levy through the PAYE process to HMRC.
Accessing the Fund
From January 2017, you can register with the new digital apprenticeship service and create a digital account.
Funds will enter your digital account on a monthly basis, and a 10 per cent top up will be applied at the same time. This means for every £1 that enters your digital account, you can access £1.10 to spend on apprenticeship training.
From April 2017, employers can use their digital account to choose a training provider. Funding to pay for apprenticeship training and assessments will be available from May 2017.
Payments will work on a first-in, first-out basis, and will be taken from the funds that enter the account first. Any funds not spent will expire 24 months after they enter the account.
Apprenticeships – choosing and paying for training and assessment
Apprenticeships are usually delivered in partnership with a training provider, like Furness College, under an apprenticeship standard or framework.
The apprenticeship standards and frameworks will be placed within funding bands which will set the maximum funding that can be used.
Employers will negotiate and agree a price to cover the cost of training, and the end-point assessment.
Only approved training providers and assessment organisations can be used.
Training providers will be paid monthly with payments taken from your digital account.
Employers will use the funds in their digital account to pay for training up to the maximum amount allowed in a funding band. If the agreed price exceeds this, they will have to pay the difference.
What can levy funds pay for?
Funds in the digital account can pay for apprenticeship training and assessment (with an approved provider and assessment organisation, up to its funding band maximum).
These funds cannot pay for wages, travel or subsidiary costs, managerial costs, work placements, traineeships, or the costs of setting up an apprenticeship programme.
Employers can use digital account funds to progress employees into a higher level apprenticeship, or an equal or lower level apprenticeship where this teaches a new set of skills.
How will companies outside the apprenticeship levy, fund apprenticeships?
Employers who do not pay the levy will not need to use digital vouchers to pay for apprenticeship training and assessment until at least 2018, with training providers still paid directly by the Government.
But they will need to choose a training provider from the registered list, negotiate the cost of the training and adhere to the funding caps for different qualifications, in the same way as larger firms that pay the AL.
Employers that do not pay the levy must contribute 10% of funding towards the cost of their apprenticeship training.
What happens if an employer starts an apprentice before the changes are introduced?
Employers that start an apprentice before April 2017 will receive funding under the current system, and that funding will continue for the duration of the apprenticeship.
For more information about the Apprenticeship levy
Furness College will help you through every step of the journey, offering an end to end service to help your business take on apprentices and manage the apprenticeship levy. Any business looking for more information or just a quick chat to find out what this could mean for them should contact a member of the Business and Employment Support Team at the College on 01229 825017 who will be happy come and visit you to talk about how they can help. Alternatively email them at email@example.com
Click on https://www.gov.uk/government/publications/apprenticeship-levy to find out more.
Additional funding for taking on an Apprentice
The Age Grant
The Apprenticeship Grant for Employers of 16 to 24 year olds (Age 16 to 24) aims to support businesses who would not otherwise be in a position to do so, to recruit individuals aged 16 to 24 into employment through the Apprenticeship programme. The National Apprenticeship Service will provide Age 16 to 24 to eligible employers, in respect of qualifying apprentices, with an individual value of £1,500. Employers can be paid five grants in total during the lifetime of the initiative. This grant availability runs until July 2017.
Furness Economic Development Forum Coastal Communities Grant
If you are a small or medium sized business with less than 250 employees operating in the Furness coastal area, you could be eligible for a Furness Economic Development Forum Apprenticeship Grant
The Furness Economic Development Forum Apprenticeship Programme provides a discretionary grant of up to £2,500 to employers operating in the supply chain, who are taking on a new or additional apprentice aged 16-24 in the following sectors:
- knowledge economy/high technology sectors of
- life sciences – biopharmaceutical
- naval shipbuilding
- offshore energy – oil gas wind nuclear
- other systems integration technologies ( we can agree what these may be)
- STEM topics
- Support services
For more information talk to a member of the Business and Employment Support Team on 01229 825017
Simply submit your enquiry to us & we will email or call you back