What is the Apprenticeship Levy?
The Apprenticeship Levy was created by the government to support the creation and funding of apprenticeships across many different professional fields. If an organisation has an annual wage bill of £3 million, then they automatically pay 0.5% of their wage bill into the Apprenticeship Levy. All organisations can receive an ‘offset allowance’ of £15,000 to support apprenticeships, which is equivalent to 0.5% of £3 million.
Where does the Levy go?
Each organisation’s Levy funding is held in a government managed Digital Account Service (DAS). The government will top-up the funding total in the digital account by 10%. Funding in the digital account will however, expire after 24 months.
How can employers access Levy funding?
When a Levy paying employer identifies De Montfort University (DMU) as their training provider, they enter the details on the DAS. This allows the Education and Skills Funding Agency (ESFA) to link the employer to DMU using the United Kingdom Provider Reference Number (UKPRN). For DMU this is 10001883.
What happens if an employer over-spends their Levy?
Co-investment funding (which is for all non-levy organisations) is still available to levy paying employers who wish to spend above their levy allocation. In this instance the government will fund 90% of the apprentice fees with the employer investing 10%.
What if an employer doesn't pay the Apprenticeship Levy?
Where employers fall outside the scope of the Levy, Co-Investment is available to support apprentice starts. De Montfort University will invoice the provider for 10% of the training cost and then the Education and Skills Funding Agency (ESFA), who are the government organisation responsible for providing the funding for Higher and Degree Apprenticeships, will ‘co-invest’ the remaining 90%.
Can non-levy paying employers receive additional financial support?
Higher and Degree Apprenticeships that start after May 1 2018 will also be able to be funded through the transfer of Levy funding. Levy paying organisations will be able to transfer up to a maximum of 10% of their levy funding to any other employer (Levy paying or not). Levy paying companies can transfer this 10% to organisations within their service delivery, to franchisees, or to any other non-levy paying organisation. Transfer payments will also be made monthly from the transferring employer’s Levy account. If the transferring employer runs out of the funds, then the employer receiving the funds will return to the co-investment model.
Are there other incentives for non-levy paying employers?
Through the Apprenticeship Grant for Employers (AGE) additional funding, if an employer has less than 50 employees (including the apprentice) and would otherwise be unable to support an apprentice, then government funding will cover 100% of the training cost of an apprentice between the ages of 16-18.
What can the funding be used for?
- Only training that is directly related to the skills, knowledge and behaviours of the apprenticeship can be funded
- Training licenses required for the specific job role
- Planned on-programme assessment (progress reviews) and the formal End Point Assessment (EPA)
- Materials (non-capital items that are necessary to enable a particular learning activity)
- Administration directly linked to the training and assessment
What is separate from the funding?
- Apprentice wages
- Travel/subsistence costs
- Enrolment, induction, prior assessment, initial diagnostic testing or similar activity
- Personal protective clothing and safety equipment required by the apprentice to carry out their day-to-day work
- Any training, optional modules, educational trips or trips to professional events in excess of those required to achieve the apprenticeship standard