The Department for Education has changed the way that it funds apprenticeships and has introduced the Apprenticeship Levy. Apprenticeships are now a devolved policy, this means that authorities in each of the UK nations manage their own apprenticeship programmes, including how funding is spent on apprenticeship training.
If you’re an employer with a wage bill over £3 million each year, you must pay the Apprenticeship Levy from 6 April 2017.
Companies can only use funds in their account to pay for apprenticeship training and assessment for apprentices that work at least 50% of the time in England, and employers can’t use funds in their account to pay for other costs associated with their apprentices (such as wages, statutory licences to practice, travel and subsidiary costs, work placement programmes or the setting up of an apprenticeship programme).
The government will automatically add 10% to the funds in apprenticeship service accounts, they will apply this 10% top-up monthly, at the same time the funds enter company accounts.
Funds that employers don’t use will expire 24 months after they enter the apprenticeship service account. Whenever a payment for training is taken from the account, the service always uses the funds that entered an account first. The apprenticeship service account will provide notifications when funds are due to expire.
These appear to be significant changes relating to how apprenticeships are funded and organised and they clearly have a cost implication for some employers, many of whom will be keen to utilise the funds.