Apprenticeship funding has changed. The introduction of the new apprenticeship levy in 2017 has meant there are changes for employers and providers who are delivering apprenticeships. The apprenticeship levy is charged at a rate of 0.5% of an employer’s paybill. Each employer will receive an allowance of £15,000 to offset against their levy payment.

We discuss the main changes to apprenticeship funding via the levy below.

Apprentices aged 16-18 will get an extra 20% of funding.

Funding has been simplified to a single funding level. As this could cut rates for 16-18-year-old apprentices, an additional cash payment has been introduced to help providers adapt. The extra 20% is in addition to another £1000 that is paid to both the employer and the provider for supporting an apprentice of this age.

Small employers with under 50 staff will get 100% funding.

Smaller businesses who have under 50 members of staff will not have to pay the Levy and will not have to make a 10% contribution to the cost of an apprenticeship for 16-18-year-olds. The Skills Funding Agency will instead fund the full 100% of the apprenticeship fee.

An extra £60million of additional support will be given to disadvantaged areas.

Apprentices who live in more deprived areas will be eligible for more funding. This ensures that all learners, regardless of their background or ability, will have the chance to benefit from participating in an apprenticeship. The levy has introduced an extra £60million to be used for additional support.

Expiry of funds in digital accounts extended to 24 months.

The initial proposal suggested that employers would lose their levy funding if it wasn’t used within 18 months. However, this was extended to 24 months to help employers prepare for the new Levy system and adapt their apprenticeship training programmes to fit accordingly.

The introduction of the Apprenticeship Levy along with opening up apprenticeships to anyone aged 16 and over should positively broaden participation in the industry amongst young people. It should also be made easier than ever for employers to hire, train and fund apprentices.

If you’re interested in hiring an apprentice within your business, we can help. For more information, please don’t hesitate to contact our team today by giving us a call on 01452 423461 or by visiting our contact page.