APPRENTICESHIP LEVY – FREQUENTLY ASKED QUESTIONS
Driven by their productivity agenda, the government is committed to achieving three million apprenticeship starts by summer 2020.
To do so, the government has confirmed the introduction of an Apprenticeship Levy from April 2017 – a fundamental change to the way Apprenticeships in England are funded. Employers with a UK paybill of over £3m from both the private and public sectors will be required to pay 0.5% of that into a levy. The levy payment will then be ring-fenced in the form of an electronic voucher that can be used to purchase apprenticeship training.
The levy is the government’s logical solution to funding the increase in numbers and putting control of funding in the hands of employers. If you are not eligible for the levy payments directly through your paybill, you will still receive funding for your apprentices.
Here are some frequently asked questions and this is by no means an exhaustive list, but you should be assured at here at ProCoNW we are here to answer any questions you have regarding Apprenticeships or training.
Claiming Government funding for Apprentice training
How can I spend/utilise the levy fund?
It must be spent with a recognised and registered Apprenticeship training provider such as ProCoNW. The levy fund can only be spent on an approved Apprenticeship standard. It cannot be spent on anything else such as internal training or apprentice salaries.
What if my Apprenticeship training costs exceeds the levy payments I have made?
The Government has outlined that it will allow employers to draw down more funds from unclaimed levy that other employers have paid. However, this will not be immediately available as employers have 2 years to use the levy before it expires.
There is also nothing stopping an organisation paying additional money to a provider on top of the levy amount if they wish.
How much does Apprenticeship training cost?
It varies and is dependent on the level and standard. All this information can be provided by us or is available from any training provider and also from the government website https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work
Can I use multiple training providers or only one?
Yes, you can use different training providers.
Can an organisation become their own training provider and draw down the training funds?
Yes, of course. However, you will be subject to Ofsted inspections and the administration that goes along with being a training provider, such as being registered on the Register of Training Organisations (ROTO).
What is the training voucher?
The training voucher is the amount of credit based on your levy payment that you will be able to use to purchase training. This is variously described as the “training voucher” or “Digital Apprenticeship Voucher”. Under the voucher scheme, you will be able to register your details on the Digital Apprenticeship Service (DAS) system which is being developed by the Government to support the uptake of Apprenticeships and will calculate the discounted rate at which you can purchase training. You will then be able to pass on the “voucher code” to the provider you have chosen to deliver training for your apprentice. The provider will reclaim the value of the voucher from the Government. The Government intends that all employers, whether they pay the levy or not, will have access to the DAS, helping them to choose an Apprenticeship, find a candidate and choose a training provider. Training vouchers can only be used to offset costs against approved suppliers who are registered on the ROTO.
How long do employers have to claim back their levy funds on Apprenticeship training?
Levy vouchers will be valid for two years. If you do not claim the levy back, then other employers can access these funds to cover the training costs for more apprentices within their organisation.
How will the Government clarify the funding rules?
Full funding rules have been issued by the Government and are available on the Apprenticeship Levy Website
Can I currently claim Government funding for Apprenticeships training?
Yes, funding is currently available for Apprenticeships and Trailblazer Apprenticeships.
What are ‘Trailblazer Apprenticeships’?
By 2017, all Apprenticeship standards will be required to have been created by employers. Groups of employers have already started to create these new standards in advance of the 2017 deadline – these are known as Trailblazers.
Do all my Apprenticeship programmes have to be Trailblazers?
Not currently – but by the end of 2017 ALL Apprenticeship standards will be replaced by these new ‘Trailblazer’ standards. The current ‘SASE frameworks’ will continue until otherwise stated by the Government.
If an Apprenticeship is not on the ‘Apprenticeship’ standard list, will it be redeemable against the levy?
No, the levy fund can only be claimed to cover approved standards that are on the Apprenticeships standard list. However, any apprentice who enrols onto an old ‘SASE’ framework prior to the introduction of the levy will continue to be funded throughout their programme. Certain frameworks may also continue to exist post introduction of the levy, but how these will be funded is unclear.
If there isn’t a Trailblazer Apprenticeship that suits my needs/ in my sector, can I create one?
Yes, the Government is encouraging every employer to find out which Trailblazers are in development and become involved in the group if you can, or if there is not one that is suitable, you can create one.
Is the funding available for Apprenticeships UK-wide?
No, England only. In Northern Ireland, Scotland and Wales Apprenticeships are funded already. They will be given a proportion of the levy and are free to determine how it is spent.
Are there any age restrictions for the apprentice to be eligible for the new funding?
No, you can use funds to train an apprentice of any age (starting at 16). However, it is best practice to use this to develop new skills be it existing staff (in a new/changed role within the company) or employing new staff.
Can I use the levy funds to offer Apprenticeships to existing staff?
Existing staff will be eligible as long as the Apprenticeship is relevant to their role and the most appropriate way of progressing/developing the learners’ career as a result i.e. upon completing the Apprenticeship the member of staff will be promoted, given more responsibility or moved into a more senior role.
Are employers required to give apprentices time off work to study?
Yes, you must give apprentices time off to study during their working hours. The number of hours and study mode is dependent on the standards and qualifications included. Do bear in mind that there will be no National Insurance payments for apprentices aged up to 24 after April 2016 as the Government acknowledges employers must allow study time. During the Apprenticeship there is a requirement for a minimum of 20 per cent ‘off the job’ training. This does not necessarily mean that apprentices must attend college, but they need to be undertaking some sort of training/development activity.
Do employers have to use the job title ‘apprentice’ for these new recruits?
Job titles are set by your organisation, however the apprentice must sign an apprentice contract of employment.
Can a graduate start an Apprenticeship?
Yes, if someone already holds a Level 6 Degree Apprenticeship, a Level 4 Higher Apprenticeship or if the Apprenticeship is in a totally different area/ specialism to their degree and is relevant to their role.
How much do we pay apprentices?
It differs. There is an apprentice minimum wage. However salaries are often much higher than this in some sectors and roles. The current minimum wage rate for an apprentice is £3.40 per hour increasing to £3.50 after the 1st April 2017. This rate applies to apprentices aged 16 to 18 and those aged 19 or over who are in their first year. Apprentices aged 19 or over who have completed their first year must be paid at least the National Minimum Wage for their age. We do encourage employers to pay their apprentices over the minimum apprenticeship wage.
Employers that don’t pay the levy
If you do not pay the levy, you won’t need to use the apprenticeship service to pay for apprenticeship training and assessment until at least 2018. When the government is ready for this they will ask you to start using the apprenticeship service to pay for apprenticeship training and they will help you to prepare.
When the new funding system begins in May 2017, you can choose the training you would like your apprentices to receive, an approved training provider and an assessment organisation using the registers available on the apprenticeship service. Help with this is available from the National Apprenticeship Service.
The government had stipulated that employers make a 10% contribution to the cost of this training and government will pay the rest (90%), up to the maximum amount of government funding available for that apprenticeship but this has now been deferred until 1st December 2017. More news will follow on this when it is available.
Buying training if you don’t have enough in your apprenticeship service account – levy-paying employers
If you pay the levy, you may find that over the course of an apprenticeship the funds in your account aren’t enough to cover the full cost of the apprenticeship training and assessment you’d like to buy. This may be the case for employers who only pay a small amount of levy or have a variable pay bill and pay the levy in some months but not others.
If you don’t have enough in your account in a particular month, you will be asked to make a contribution to the extra cost of training and to pay this directly to the provider, rather than through your account. You will be able to spread this contribution over the lifetime of the apprenticeship and agree a payment schedule with your provider. There will be some government support to help you meet these additional costs, up to the maximum amount of funding available for that apprenticeship. As both you and government make a payment, we call this ‘co-investment’. This will be set at the same co-investment rate as for employers who do not pay the levy, with government paying 90% towards the extra cost of training and assessment and employers paying the remaining 10%
What is the End Point Assessment (EPA)
The introduction of independent end-point assessment (EPA) is one of the biggest changes in the Government’s Apprenticeship Reforms.
End-point assessment is a new way of assuring quality in the apprenticeship system. It replaces the existing model of continuous assessment resulting in qualifications.
Once an apprentice has completed their apprenticeship, they will be ‘signed off’ by their employer as ready for end-point assessment of their knowledge and practical capabilities. In most cases, the assessment will be graded and must show the apprentice is fully competent and productive in the occupation.
The registered assessment organisation and the assessor must be independent of, and separate from, the training provided by the provider and employer.