The Apprenticeship Levy is Finally Here
The apprenticeship levy is finally here.
Employers with a payroll of over £3m will pay 0.5% of that payroll out in levy, and will then get it back (plus 10%) to spend on apprenticeships training, certification and – where included within a framework or standard – qualifications. They will be able to spend their apprenticeship vouchers with any training provider that’s on the Register of Apprenticeship Training Providers.
The government wants 3 million apprenticeships during the lifetime of this Parliament (2015-20), and the levy is one tool being used to encourage employers who don’t take on many (if any) apprentices at the moment to increase their numbers. As we drive towards 3 million starts we must take care not to dilute the quality of apprenticeships. Although they’re not required, many of the newly developed apprenticeship standards include recognised qualifications, which employers have pushed for as they give apprentices real evidence of their transferable skills and competences.
Transfer of levy funds between employers is something we know many employers who use EAL qualifications wanted, and from April 2018 this will be possible (up 10% of an employer’s apprenticeship voucher total). The government also listened to calls from us and others within our sector to extend to two years the ‘use it or lose it’ period after which levy funds will be lost to employers who pay them – in the sectors EAL serves, apprenticeships tend to last much longer than the one year minimum set by government, and a longer period to use up vouchers will enable employers to plan further ahead and give EAL centres a bit more certainty too.
Apprenticeships funding is no longer set to be differentiated depending on the age of an apprentice, so there’s a fantastic opportunity for employers to use apprenticeships to upskill their current workers as well as to bring in new talent. Given that under the levy employers will be able to fund apprenticeships at the same level as an individual’s existing highest qualification, there is also a great opportunity to use levy funds to reskill those who are looking for a change in career direction. The new 90:10 funding ratio for non-levy funded apprenticeships also means that smaller employers will now have a cost-effective way to get the right training to meet their needs. With employers now in control of the funding through the new online Apprenticeship Service, EAL centres will need to be quick off the mark to secure their business.
Remember too that existing STEM frameworks will be given a funding uplift (40% for Level 2, 80% for Level 3+) – so if you like the frameworks, now is the time to use them and get apprentices signed up, as once the standards to replace them have been developed they will be switched off for good. You can see which frameworks are currently live on the government website – and if you need advice, EAL’s experts will always be happy to give it.
Under the new system, 20% of the total cost of the apprenticeship will be held back to be paid at the end of the programme – regardless of whether the apprentice passes or fails the End Point Assessment that must be included in all apprenticeship standards. EAL is proud to be on the Register of Apprentice Assessment Organisations (RoAAO). We are in the process of applying to offer EPA for standards in our core sectors – we will take the expertise and knowledge gained from 25 years of successful qualifications development and use all of that to provide a service to employers with quality at its heart.
If you’re an EAL centre and you need help navigating this brave new world of apprenticeships funding, give us a call on 01923 652400 or visit our dedicated web portal with all the information you might need.