Levy-paying employers
UK employers with a pay bill of £3million or more will pay the apprenticeship levy. This money can be accessed through the Apprenticeship Service and can only be used for apprenticeship training. If employers don’t use the levy funds within two years, the Government takes unused funds back. If they use all their levy and want to train more apprentices, employers pay for them using the same payment model as an SME (see below). The levy is collected by HMRC via the PAYE process. The Apprenticeship Service can be found here.
Full Information on paying the levy and HMRC requirements can be found here -
Non-levy paying (micro-businesses and SMEs)
SMEs with a pay bill under £3million contribute 5% towards the total cost of an apprenticeship and the Government pays the remaining 95%. This payment model is also used for levy-paying employers who have exhausted their levy funds.
The Government funds 100% of the cost of apprenticeship training for a 16-18 year old for businesses with fewer than 50 employees.
Transferring Levy Funds to Other Employers
Employers that pay the apprenticeship levy can choose to transfer up to 25% of their levy funds each year to other businesses, to pay for their apprenticeship training and assessment.
Transferring levy funds is a way of supporting other businesses, suppliers and partners. It can also contribute to meeting skills gaps in a region or sector, making it easier to recruit staff in the future. Employers can choose who to transfers levy to and which sectors or occupations they want to fund. Any receiving employer must be on the Apprenticeship Service.
Full information on Transferring levy funding can be found here.
The Apprenticeship Service is an online portal for employers to manage their levy account. It shows the amount of funding available and lets employers make virtual payments to providers for delivery of their apprenticeships. It includes the “Find an Apprenticeship Provider Tool” with details of nearby apprenticeship providers. It will show which apprenticeships the provider offers as well as performance data so that employers can make informed decisions when negotiating delivery and price with providers.
You can access the Apprenticeship Service here.
The Government will contribute £2,000 towards the cost of apprenticeships for 16–18 year olds: £1,000 to the employer and £1,000 to the training provider.
If an employer is delivering their apprenticeships as an employer provider they can claim the full £2,000 incentive.
The Government pays the full cost of a 16-18 apprenticeship for any employer with fewer than 50 employees.
Apprenticeship standards and frameworks fall into funding bands. These are the maximum amount the Government considers is needed to deliver the apprenticeship. The upper limit of those bands goes from £1,500 to £27,000. Within the band, employers can negotiate with providers over the cost of delivery. The funding band is regardless of the apprentice’s age or location.
The list of apprenticeship standards and their funding band is updated regularly and can be found here.
The 30 funding bands:
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1
|
£1,500
|
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2
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£2,000
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3
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£2,500
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4
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£3,000
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5
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£3,500
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6
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£4,000
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7
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£4,500
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8
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£5,000
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9
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£6,000
|
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10
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£7,000
|
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11
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£8,000
|
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12
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£9,000
|
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13
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£10,000
|
|
14
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£11,000
|
|
15
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£12,000
|
|
16
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£13,000
|
|
17
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£14,000
|
|
18
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£15,000
|
|
19
|
£16,000
|
|
20
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£17,000
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|
21
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£18,000
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22
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£19,000
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|
23
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£20,000
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|
24
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£21,000
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25
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£22,000
|
|
26
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£23,000
|
|
27
|
£24,000
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|
28
|
£25,000
|
|
29
|
£26,000
|
|
30
|
£27,000
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The ESFA publishes annual Funding Rules for Apprenticeships, laying out the requirements providers and employer providers must adhere to. Funding for delivery of apprenticeships is claimed by submitting a monthly Individual Learner Record (ILR) data return to the ESFA. The content of the return must match the data the employer enters to their Apprenticeship Service account.
The ESFA is responsible for monitoring spend of public funds such as the levy and other skills funding. To ensure Funding Rules are being adhered to the ESFA carries out annual audits on providers’ data and financial information and evidence of delivery and will remove funding if they find any irregularities.
The Funding Rules and Regulations can be found here.
Apprentices must achieve maths and English as part of their apprenticeship if they don’t already have the relevant qualifications. A level 2 Apprenticeship requires a minimum of level 1 in maths and English, and an apprenticeship at level 3 requires a minimum of level 2 in maths and English.
If an apprentice is taking a level 2 apprenticeship and already has a level 1 functional skills qualification in English and maths, they must be given the opportunity to study for and take the assessment for the level 2 in English and Maths, but they do not have to pass to go through Gateway.
City & Guilds offer Functional Skills in maths and English at levels 1 and 2, these qualifications are included in the approved maths and English apprenticeship offer. We also offer a variety of smaller awards and units that are funded and can be used to support apprentices to progress to functional skills qualifications, if needed.
You can have a look at our slides and webinars for apprenticeship funding guidance.
Or find out more about apprenticeship funding rules and government apprenticeship funding on gov.uk. We’ve picked out some useful ones here: