Views sought on proposals for apprenticeship funding in England from May 2017

15 August 2016

The Department for Education (DfE) and the Skills Funding Agency (SFA) have published a discussion paper on the proposed apprenticeships funding support package that will operate in England from May 2017.

The Proposals for apprenticeship funding in England from May 2017 include:

  • How much employers will be able to spend on each apprenticeship
  • The rules employers will need to follow.

The lists of individual apprenticeships show the proposed funding bands that will apply from May 2017 in England.

Guidance updated

In April 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.

 

Survey

The DfE would like to hear employers’ and providers’ views on these proposals, particularly how they plan to adapt their hiring, training and development activities in response to these reforms. The DfE have published a survey (closing date 5 September 2016) which applies to all employers and training providers who operate in the UK.

Although skills policy is a devolved matter in Scotland, Wales and Northern Ireland views are also welcomed from employers in these nations.

The proposals outlined include plans to:

  • support all employers to offer high-quality apprenticeships: employers which are too small to contribute to the apprenticeship levy would have 90% of the cost of apprenticeship training paid - ensuring employers of all sizes can develop the next generation of skilled workers
  • provide extra funding for young apprentices and care leavers: the government will pay an additional £2,000 to help 16- to 18-year-olds, young care leavers and young people with an education, health and care (EHC) plan, make their first step into the world of work - with £1,000 going to employers and an additional £1,000 to training providers. Furthermore, employers with fewer than 50 employees will not have to pay anything towards the cost of training a 16- to 18-year-old apprentice, young care leaver or young person with an EHC plan
  • offer more flexibility for employers to retrain individuals: employers will be able to use levy funds to retrain workers in new skills, even if they have prior qualifications - giving them the freedom to make the training decisions that are right for them so they can train any individual to start an apprenticeship, as long as it is significantly different from their previous qualifications
  • support employers taking on more apprentices: levy-paying employers - those with a pay bill of over £3 million that want to spend more on training than is in their digital account - will benefit from government support with 90% of their additional apprenticeship training costs being funded, so they can continue to recruit and retrain highly-skilled employees
  • give employers more control and access to better quality training: employers will have the power to determine exactly what training their apprentices receive and what provider they receive it from. A new register of training providers, also outlined, will be introduced from April 2017 to improve the link between training providers and employers to will help employers identify a high-quality provider so they can deliver the skills they need to grow.

Next steps

Throughout the summer, DfE and SFA will be engaging with employers, providers and other stakeholders as well as listening to views from the online survey. This will help to refine and develop the proposals ahead of October 2016, when it is planned that the following are published:

  • The final funding bands that will apply in the new system
  • The final, full set of technical rules that underpin the funding system
  • Confirmation of how the proportion of pay bill that is paid to employees living in England will be calculated.

In December 2016 further employer guidance from HMRC on how to calculate and pay the apprenticeship levy will be published.