Today has seen the publication of the government’s long-awaited new guidance on how the apprenticeship levy will operate. The new system will be introduced on 6 April 2017.

A consultation on the plans opens today, and will close on 5 September, with the final proposals due to be confirmed in October.

Here are the key points from the proposals released today:

1. Employers that are too small to pay the levy will have to pay 10 per cent of the training costs, with the remaining 90 per cent paid by the government;
2. Employers with fewer than 50 people working for them will not have to pay towards training costs of 16-18 apprentices, which will be 100 per cent met by government;
3. When employers take on a 16-18 apprentice, they will receive £1,000 to “meet the extra costs associated with this”. This would be paid to employers in two equal instalments after three months and 12 months, as under the current funding system. Initially, these payments will be made to employers via their training provider; eventually, the government says this will be paid directly to employers;
4. Extra support of £2,000 will be available for employers and training providers that take on 16-18-year-olds or young care leavers with an education, health and care (EHC) plan. The employer and provider will each receive £1,000. Employers with fewer than 50 employees will also have 100 per cent of their training costs paid for by government if they take on these apprentices;
5. Employers will be able to use levy funds to retrain workers in new skills, even if they have prior qualifications. The government says this will “give them the freedom to make the training decisions that are right for them so they can train any individual to start an apprenticeship, as long as it is significantly different from their previous qualifications”;
6. Levy-paying employers - those with a pay bill of more than £3 million - that want to spend more on training than is in their digital account will see 90 per cent of their additional apprenticeship training costs funded by government;
7. A new register of training providers will be introduced from April 2017 to “improve the link between training providers and employers to help employers identify a high-quality provider so they can deliver the skills they need to grow”;
8. The proposed funding system will consist of 15 bands, each with an upper limit ranging from £1,500 to £27,000. This will be the maximum amount of digital funds an employer which pays the levy can use towards an individual apprenticeship or that the government will co-invest. All existing and new apprenticeship frameworks and standards will be placed within one of these funding bands, with employers left to negotiate prices with providers;
9. For science, technology, engineering and maths framework pathways, the government is proposing to increase the government-funded adult rate by 40 per cent at level 2 and 80 per cent at level 3 and above, and then allocate these frameworks to the nearest funding band. This “takes into account the fact that employers of these apprentices are currently disproportionately likely to be paying extra to providers on top of the funding provided by government”. The uplift will be applied to the following areas: engineering and manufacturing technologies; information and communication technology; science and mathematics; and construction, planning and the built environment.

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