Below are the answers to some frequently asked questions we receive about degree apprenticeships and the Government Apprenticeships Levy.
If you can't find an answer to your question below please contact us.
The UK Government is introducing the Apprenticeship Levy in April 2017 to fund a step change in apprenticeship numbers and quality – delivering on the commitment that there will be 3 million apprenticeship starts by 2020. The Levy will put apprenticeship funding on a sustainable footing and improve the technical and professional skills of the workforce (an important component of productivity).
The Levy is 0.5% of employers pay bill collected monthly via PAYE. All employers will have an allowance of £15,000, which means that the Levy is applicable on pay bill over the first £3,000,000.
The money will be collected by HMRC. Individual employers’ funding will then be made available to them via a new digital account, through which employers will be able to pay for training for apprentices. In England, employers will be able to direct funding towards the apprenticeship training they want through a new Digital Apprenticeship Service (DAS). The Service will also support employers to identify and pay a provider, choose an apprenticeship training course, find a candidate and choose a training provider.
Employers will be free to spend their money on apprenticeships training which they judge best meets their needs. However, funds can only be spent of government approved apprenticeship training providers i.e. those that are on the Register of Apprenticeship Training Providers (RoATP)
Anglia Ruskin University's degree apprenticeships are included as part of the training courses available and provide an excellent way to allocate funding to gain the best possible return.
Employers with a pay bill of less than £3m will not have to pay the Levy. This is more than 98% of all employers. These employers will continue to have access to government funding to support apprenticeships. All employers will have access to the Digital Apprenticeship Service whether they have paid the Levy or not and will be able to use it to manage the Government funding available to them to pay for apprenticeship training.
Additional funds will also be made available for apprentices living and working in deprived areas.
Levy funds will expire after 24 months if they are not spent on apprentice training. Whenever a payment is taken from the account, the service automatically uses the funds that entered the account first to minimise the amount of expired funds. If an employer does not spend their entire Levy on training then the unspent portion will be made available to other employers who are investing in apprenticeship training, so there is an incentive for employers to use their Levy fund.
Employers will also be able to pay for training of other employers’ apprentices, e.g. someone in their supply chain. 10% of the annual value of funds can be used in this way.
Employers will not be able to spend an unlimited amount of money on a single apprentice. Funding caps will be set which limit the amount of Levy funds an employer can spend on training for an individual apprentice. The cap will vary according to the level and type of apprenticeship (for example, more expensive, higher quality training is likely to have a higher cap).
There are two circumstances where employers are likely to have to contribute additional funds:
i) where the cost of the training they wish to buy is greater than the funding cap for a particular standard or framework and;
ii) where an employer has spent all of their Levy contribution and all of their top-up and wishes to spend more on additional apprenticeship training.
Due to the higher costs involved in taking on 16-18 year old apprentices, in addition to the price that the employer and provider agree for training to 16-18 year olds on a framework, the provider will also receive a payment from government equivalent to 20% of the funding band maximum for that framework.
Please note: apprentices will need to be at least 18 years old to enrol on a degree apprenticeship.
Apprenticeships offer transferrable, valuable skills which are beneficial to both the apprentice and the employer. If you currently offer in house training please speak to us about how you could accredit your existing programme.
If an apprenticeship isn't currently available for your sector please speak to us to explore developing one.
Keep up to date with the levy through the Government website.
The above information is based on Million+ FAQs and Government guidance on the Apprenticeship Levy. Information is correct as of 12/08/16 and is subject to change.