New Apprenticeship Levy detail published…at last!

12 August 2016

The Government has revealed further information about the Apprenticeship Levy.

This update, originally expected at the end of June had been severely delayed, firstly by the Brexit vote and then the subsequent reshuffle. Responsibility for apprenticeships has passed from BIS to the Department for Education, where on Friday, new Apprenticeships and Skills Minister, Robert Halfon MP unveiled fresh details on the proposed workings of the Levy.

We already knew that from April 2017, a levy of 0.5% will be taken from annual company payrolls exceeding £3million. Each Levy-paying employer will build up a “digital account” from which they can draw down to fund accredited training from accredited suppliers. The government will “top-up” this account by 10p per pound and firms will have just 18 months to spend the levy or lose it.

 

The new information revealed on Friday contains some good and bad news. Overall the reaction from wider industry has been mixed and cautious.

Firstly, the bad news: The Levy is going ahead on the original timetable with HMRC taking the initial deductions in April 2017. Even before the economic uncertainty around Brexit, there had been calls from many employer organisations to scrap or delay the Apprenticeship Levy with worries that the timescale does not give companies, or indeed the government itself, time to prepare.

The good news is that the level of co-investment for non-Levy paying employers is higher than we had been expecting. Companies whose payroll is below £3 million will have 90% of Apprenticeship training and assessment costs paid by the government. Even Levy paying employers will benefit from this level of co-funding once their own Levy pots have been fully utilised.

The government have also proposed that employers should be able to use Levy funds and access co-investment for re-training. This will allow an individual to undertake an apprenticeship at the same or lower level than a qualification they already hold, providing they acquire substantive new skills and the training is materially different from any previous training undertaken.

Apprenticeships and Skills Minister, Robert Halfon said, “Our businesses can only grow and compete on the world stage if they have the right people, with the right skills. The apprenticeship levy will help create millions of opportunities for individuals and employers. This will give our young people the chance they deserve in life and to build a highly-skilled future workforce that the UK needs.”

However Confederation of British Industry director-general, Carolyn Fairbairn, said, “The levy is too narrowly defined. It covers only one type of training and employers can only reclaim off-the-job costs. As a result, valuable forms of training risk being cut back, with quantity put ahead of quality.” UK Screen agrees with this sentiment.

UK Screen has also been saying that the government should initially allow the levy to be used for standards creation of which there are very few relevant to the film & TV facilities sector.  UK Screen’s CEO, Neil Hatton said, “Without relevant apprenticeship standards, there will be no relevant accredited courses and it will be very difficult to spend the funds built up in companies’ digital accounts.” The government is still adamant that the Levy can only be used for off-the-job training and assessment costs.

The government has released details on funding bands that define the maximum amount that can be spent on an individual apprenticeship. UK Screen will be scrutinising whether the new VFX apprenticeships for Junior 2D Artist and Assistant Technical Director have been placed in the correct band. Currently these standards have a maximum funding cap set at £9000 per apprentice.

 

Here are the links to the new government documents containing all the details:

Press release: Views sought on plans to boost apprenticeships

Policy paper: Apprenticeships: proposals for funding from May 2017

Guidance: Apprenticeship levy: how it will work

Transparency data: Apprenticeships: government spending and expected levy payments

 

The DfE has also produced a guide for employers that wish to fund their own internal training academies by reclaiming their Levy contributions:

Guidance: Apprenticeships: become a training provider

 

 

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