Apprenticeship Reforms and the Levy
Apprenticeships are now a trusted and valued way for people to gain nationally recognised qualifications whilst building up the practical skills and experience employers need across all industry and service sectors.
The Government is investing in apprenticeships and has a target of creating 3 million new apprenticeship starts by 2020 and has introduced reforms to enable this to happen.
The Government are reforming apprenticeships, both the programmes and how they are delivered and assessed and the way apprenticeships are funded.
New employer designed apprenticeship standards are being introduced, which will describe the skills, knowledge and behaviours that an individual needs to be fully competent in an occupation. The government plans to replace the current Apprenticeship frameworks with Apprenticeship Standards by 2020. Apprenticeship Standards have been designed by groups of employers, each Standard will have an Independent End Point Assessment which must be completed and passed in order to complete and achieve the Apprenticeship.
The reforms will help to improve the quality of apprenticeships with English and maths at level 2 forming an essential part of the programme for those who haven’t already gained these qualifications. Apprenticeships have been given equal legal protection to degrees.
How the funding works
Funding for apprenticeships will change from the 6th April 2017 with the Apprenticeship Levy and co-investment for non-levy paying employers being introduced.
Employers in any sector with a pay bill of £3 million will be required to pay an apprenticeship Levy which will be charged at a rate of 0.5% of their annual pay bill, and will be paid to Her Majesty’s Revenue and Customs (HMRC) through the Pay as You Earn (PAYE) process. These employers will then be able to access funding for apprenticeships through a new digital apprenticeship service account.
Employers with a pay bill of less than £3 million are not eligible to pay the levy, and won’t need to use the digital apprenticeship service (DAS) until at least 2018.
These employers will be asked to make a 10% contribution to the cost of apprenticeship training to their training provider and the government will pay the remaining 90%.
Employers with fewer than 50 people working for them will be able to train 16 to 18 year old apprentices without making a contribution towards the cost of training and assessment, as the government will pay 100% of the training costs for these individuals.
For both employers and providers, there will be a £1,000 payment for recruiting a 16-18 year old on an apprenticeship framework or standard, as well as for 19-24 year olds who were formerly in care or who have an Education and Health Care plan. This will be paid to employers in two equal instalments at 3 months and 12 months. Initially, these payments will be made to employers via their training provider.
There will be a register of Apprenticeship Training Providers established in March 2017, only providers who are on this government register will be able to deliver apprenticeships.
Employers select their provider and agree the terms of the apprenticeship programme to include how it will be delivered, duration and fees.
The employer will also determine who they would like to complete the End Point Assessment (from a selection of registered organisations).
Wirral Met is the largest provider of apprenticeships in Wirral and provides training and development to apprentices across a wide range of industry and service sectors.
We can support and guide you through the apprenticeship reforms and levy process.