Information for levy paying organisations
The government has set a target for 3 million apprenticeships to start in England by 2020. To support this goal, a series of changes in the way apprenticeships work have been implemented.
What is the Apprenticeship Levy?
From April 2017, all employers with a wage bill of more than £3 million will pay a monthly apprenticeship levy equal to 0.5% of their wage bill. The money generated will be used by these employers to pay for their apprenticeship training.
Using your digital account to pay for apprenticeship training
If you are a levy payer, you will pay for apprenticeship training and assessments via your DAS account from May 2017. You can spend your digital account monies on apprenticeship training for new apprentices and existing staff. To use your Levy amount for existing staff, there must be a training need identified (eg: promotion, change in job responsibilities etc).
There are three things to think about when planning how to spend your levy:
1. What existing training do you have in place that could be an apprenticeship? e.g. management training programmes
2. What other training and progression requirements do you have amongst existing staff e.g. accountancy, team leading and marketing
3. Where might you want to recruit new apprentices e.g. in areas of the business where you have skills shortages and/or are expecting growth
Once your apprenticeship Levy payments have been spent, you can still take on extra apprentices. The government will fund 90% of the cost of the apprenticeship, and your organisation will have to contribute just 10%.
Any un-spent monthly payments in your digital account will be removed after 24 months. This will be used to fund apprenticeship training for smaller non-levy paying organisations.
Information for non levy paying organisations
From May 2017, the government will pay 90% of the cost of apprenticeship training and assessments. Each employer is expected to contribute a standard 10% across all apprenticeship programmes. The costs are calculated using funding bands for apprenticeships which the Government has set. Details can be found here: https://www.gov.uk/government/publications/apprenticeship-funding-bands.
Additional Support for small employers
If your organisation has less than 50 employees and you recruit an apprentice aged 16-18, there will be no cost to you for the apprenticeship training and assessments. It will be fully funded by the government.
Paying for apprenticeship training
The College will agree costs and payment details with you at the sign-up meeting once your apprentice has started. Typically, the College will invoice you for your 10% contribution within 60 days of the apprenticeship starting
The Digital Apprenticeship Service
The Digital Apprenticeship Service (DAS) is a new online portal for employers to manage their levy payments, access funds and search for training providers. Levy payers will have access to this account from February 2017. Non-levy payers will not be required to use the DAS to pay for apprenticeship training until a later date (to be announced).