The Government sets out how apprenticeships will be funded

27 October 2016

27 October 2016

The government has set out how apprenticeships will be funded as part of the drive to help millions get the skills they need for a successful career and make Britain a country that works for everyone.

Apprenticeships give people more control over their lives and can be the difference between just about managing and pursuing a skilled, long-term career.

The funding policy will underpin the new apprenticeship levy, which will deliver much needed investment in the skills we need to change the lives of millions.

The government will continue to work with employers and providers as it introduces the reforms.

Main measures confirmed are:

  • more support for younger apprentices and disadvantaged people:
    • 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 in order 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 £60 million will be invested in supporting the training of apprentices from the poorest areas in the country, equalling around one third of all apprentices. To ensure that these funds are being invested in the right way the government will conduct a fuller review into how to support individuals from all backgrounds into apprenticeships in future. This will look at the support employers should receive, as well as providers, and conclude next year.
  • more flexibility for employers:
    • longer for employers to spend funds in their digital account, now with 24 months before they expire, an increase from government’s original proposal of just 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, with a new employer group including the Confederation of British Industry, Federation of Small Businesses, British Chambers of Commerce, Charity Finance Group and EEF - the manufacturers’ organisation - to help government develop this system so that it works for employers
    • 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. This will support the industrial strategy and provide wider opportunities for more individuals to develop new skills

In March 2016 the government published a guide for employers on how they will pay the levy, access the digital system and pay for apprenticeships in future. This has been updated with the latest information for employers.

The CIPP will be running training courses on the apprenticeship levy from January 2017.  The course dates will be announced on the CIPP website very shortly.