The government has announced updated plans for the apprenticeship levy.
The Department for Education announced today long-awaited details on apprenticeship funding rates and how the levy will work, with the confirmed changes giving employers greater flexibility and an increase in the amount of time they have to use their funding.
The main details released today include:
- 100% of training costs will be paid by government for employers with fewer than 50 employees who take on apprentices aged 16 to 18 years old. This will also apply to smaller employers who take on 19-to-24-year-olds who were in care, or 19-to-24-year-olds with an Education and Health Care Plan.
- £1,000 each from government to employers and training providers who take on 16-to-18-year-olds and 19-to-24-year-olds who were in care or who have an Education and Health Care Plan.
- Providers that train 16-to-18-year-olds on apprenticeship frameworks will be given an additional cash payment equal to 20% of the funding band maximum to help them to adapt to the new, simpler funding model.
- Providers that train apprentices from the most deprived areas on apprenticeship frameworks will continue to receive additional funding from government. More than £60m will be invested in supporting the training of apprentices from the poorest areas in the country, equalling around one third of all apprentices.
- Employers will have longer to spend funds in their digital account, now with 24 months before they expire, an increase from government’s original proposal of 18 months.
- A commitment to introducing the ability for employers to transfer digital funds to other employers in their supply chains, sector or to Apprenticeship Training Agencies in 2018.
- More funding for STEM apprenticeship frameworks and higher pricing of apprenticeship standards to support improved quality, and providing greater flexibility to train those with prior qualifications.
The Federation of Master Builders (FMB) welcomed the new greater flexibility and said the ability for larger companies to transfer unspent apprenticeship funding to smaller firms was a boon for the construction sector.
Brian Berry, chief executive of the FMB, said: “Ensuring that there is plenty of flexibility within the digital voucher model is critical to the apprenticeship levy’s success. This is especially true for the construction sector as two thirds of all construction apprentices are trained by SMEs. As long as larger contractors are unable, or unwilling, to play a greater role in industry training, then it’s vital that funds can be rerouted to smaller firms.
He added: “We had some concerns that if larger companies were not able to pass their vouchers onto smaller firms, the money would be left languishing in the general pot before eventually being spent by other sectors. Now it’s a question of ensuring that the digital voucher model is simple and easy for small firms to navigate.”
Steve Radley, director of policy at CITB, commented: “Government’s changes to the funding bands for apprenticeship frameworks go some way to responding to the concerns raised by industry on affordability, especially since the new apprenticeship standards are not available for the vast majority of occupations.
“The funding offer has been improved and transition periods have been introduced, which offer the industry breathing space. The priority now must be to get the new standards agreed as quickly as possible, so that employers can use them and access the higher funding rates they carry.”
