Despite appeals from employer groups such as the Confederation of British Industry, the levy is still on course to start being collected in April 2017, with the introduction of the new provider funding system beginning a month after. This is so that ‘levy paying employers can use funds in their digital account to pay for training from the first month they declare levy payable through the PAYE system’.
The biggest news – and of some relief to the approximately 98% of employers in the UK who will be non-levy payers under the new regime – is that these employers will pay 10% of the apprenticeship cost, with the government paying the remaining 90%.
This will also apply to those levy payers who’ve used up their levy ‘pot’ in a given month.
Given the volume of apprenticeships undertaken by those employed by SMEs, this news will hopefully allay some of the concerns that have been prevalent over the past few months.
Even more welcome is the clarification that the government has proposed waiving the co-investment requirement for small and micro employers (with fewer than 50 employees) that train 16-18 year old apprentices.
We hope that this will incentivise employers to take more young people into their workforce and unlock the opportunities apprenticeships offer. We’d also press the government to reconsider the apprenticeship minimum wage for this age group, as these in combination would really help towards the government’s 3 million target.
Colleagues in the sector are being asked to contribute to a consultation on the above proposals. However, with this taking place over the summer break, it may distort the nature of responses they receive on the proposals.
We await the publication of further information by October 2016, when we will learn the final funding bands that will apply to frameworks and standards, alongside the full set of technical rules that underpin the funding system. We will also get further confirmation of how the proportion of the pay bill that’s paid to employees living in England will be calculated.
For the Apprenticeship Levy (and reform programme more broadly) to become a success, stakeholders need essential information clarified as soon as possible, to allow the maximum time for planning and implementation.
We’d hope that there isn’t a similar delay for the forthcoming information and that the new Minister of State for Apprenticeships and Skills listens closely to the concerns of employers, providers and apprentices themselves to create a truly world class apprenticeship system.
