Better late, than never
“Better late than never” as my mum used to say, and that has proven to be the case with the latest Levy announcements which were expected in June, but actually arrived in August. However, it is fair to say that it has been a busy few months on the political landscape, both with Brexit and the new government, so a delay is not an unreasonable consequence.
Many of the discussion points over the last few months have now been confirmed and businesses are finally in a position where they can start to plan for the future. So what do we know?
Firstly, the Levy is payable from April 2017 as there had been many rumours that Brexit might cause it to be delayed or even postponed altogether. From 1st May 2017 all new apprenticeship starts will operate under the new system, with any starters prior to this date following existing funding rules.
Employers will receive a 10% top up monthly to their digital levy account courtesy of the government and also 10% is a key figure for co-investment purposes. Should an employer want to spend more than the funds available in their digital levy account, then they will only need to pay 10% of the additional cost, as Government will co-invest and pay the remaining 90% of the additional cost. This also applies to smaller organisations with a pay-bill of less than £3m who will have to contribute 10% to the cost of an apprenticeship, with the remainder funded by government, unless of course they have less than 50 staff in which case all apprentices are fully funded. I hope you’re still with me so far.
Sometimes less is more, but in this case, in order to simplify the system further there will be the introduction of 15 new funding bands (we did have 5 for Trailblazers) stipulating the maximum costs to deliver both apprenticeship frameworks and Trailblazer standards. The lowest band is £1,500 and the highest band is £27,000. As the standards are generally more expensive to deliver, they are funded at a higher rate. All age groups within each band will be funded at the same rate with no premium rate for 16-18 year olds, but the government will pay £1, 000 to both the employer and the Training Provider when the employer takes on a 16-18 year old apprentice. This payment will be in equal instalments of £500 at both 3 and 12 months, so a clear incentive to entice employers to invest in the younger generation.
One very significant change is to the eligibility criteria and who can be funded to undertake an apprenticeship. The eligibility criteria has been relaxed and employers can now use their levy funds to train apprentices at the same or lower level qualification than they already hold, provided that the apprenticeship will allow the individual to acquire substantive new skills and the content of the training is materially different from any prior training or previous apprenticeships. This will now allow individuals who have higher level qualifications such as degrees, to do apprenticeships in management.
Unfortunately, to quote Donald Rumsfeld, there are still “known unknowns” as regards the devolved nations which impacts businesses with workforces spread across the UK. As Scotland, Wales & Northern Ireland have their own arrangements for supporting employers to access apprenticeships we are still waiting to hear whether they will replicate the English model or simply do their own thing. We do know that Levy funds can now be used for apprentices whose main workplace is in England, even if they live outside of England, provided they are undertaking an English framework or standard, but that only really covers those living on the border.
Finally, there is a proposal to allow benevolent employers to transfer the magic figure of 10% of their funds to another employer’s digital account, but this will not be until 2018, and that is then subject to EU State Aid regulation.
So, was it worth the wait?
Well, we know more now than we did in June which will certainly allow us to plan better, but with only 7 months to go before the first Levy payments are made, there is a growing need to know the full picture.