Government reveals Apprenticeship Levy detail

The government has finally unveiled the detail behind its plans to fund apprenticeships and how it plans to make the levy work.

In a flurry of announcements, delivered to both head off criticism that earlier planned cuts would have hit less privileged applicants, and to reveal the detail about how it plans to bankroll the three million new apprenticeships the government claims will be created by 2020.

In a written statement, education secretary Justine Greening said the government would provide an additional 20% payment to train 16-18 year olds while keeping a ring-fenced support mechanism of around £60m to ramp up funding in disadvantaged areas.

The new Apprenticeship Levy, to be introduced in April 2017, will be set at 0.5% of a company’s pay bill and only employers with one over £3m will have to ‘pay’ it.

Employers not eligible to pay the levy will receive government support towards meeting the costs of apprenticeship training and assessment.

Skills minister Robert Halfon (pictured) said: “The measures announced today are the first steps in upskilling the nation by giving millions a leg up on the ladder of opportunity to high-quality jobs, and giving employers the skills they desperately need.”

Key measures

Among the key measures announced today are that 100% of training costs will be paid by government for employers with fewer than 50 staff who take on apprentices aged 16 to 18 years old. This will also apply to smaller employers who take on 19- to 24-year-olds who were in care, or 19- to 24-year-olds with an education and health care plan.

A sum of £1,000 each will be paid to employers and training providers who take on 16- to 18-year-olds and 19- to 24-year-olds who were in care or who have an education and health care plan.

And providers that vow to train 16- to 18-year-olds on apprenticeship frameworks will be given an additional cash payment equal to 20% of the funding band maximum in a bid to help them to adapt to the new funding model.

Cambridge Regional College principal Mark Robertson dubbed the levy “a game-changing approach to the training and development of people across the country’s largest organisations” while Leo Quinn, Group CEO at Balfour Beatty, said “as employers we have a responsibility to train the next generation with the skills that our businesses will need to drive the British economy forward in the decades ahead”.

The government also promised to deliver more flexibility for employers by giving companies 24 months to spend funds in their digital account, up from 18 months.

Another employer-centric fillip is enabling companies to transfer their digital funds to other employers in their supply chains, sector or apprenticeship training agencies in 2018. A new employer group that includes the Confederation of British Industry (CBI), the Federation of Small Businesses (FSB) and the British Chamber of Commerce (BCC) will be forged to help the government develop it and ensure it works for employers.

TUC general secretary Frances O’Grady said the levy “will give a welcome boost to funding for apprenticeships, and will make sure that all employers who benefit from a skilled workforce are paying their way”.

The register of apprenticeship training providers is now open for applications.