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Apprenticeship Levy


The Apprenticeship Levy

The introduction of the Apprenticeship Levy was announced as part of the Comprehensive Spending Review (CSR) in the Autumn of 2015. From April 2017, those employers with a pay bill of over £3 million per year will pay 0.5% of their pay bill as an Apprenticeship Levy. All employers will have an allowance of £15,000 which means the levy is only payable on pay bills over £3 million for each tax year.

The Levy will be paid by the normal PAYE process to HMRC on a monthly basis and the funds will be allocated to the employer’s online Apprenticeship Service account. The employer will have 24 months to use and spend these funds on Apprenticeship training. The oldest funds in the account will be used first. In addition to the Levy paid by the employer, HMG will provide a top up of 10%; thus for every £1 an employer pays, £1.10 will be placed into their levy account. The levy allowance will operate on a monthly basis and will accumulate throughout the year. Any unused allowance will be carried over from one month to the next.

Employers will pay Education/Training Providers from their Apprenticeship Service account on a monthly basis spread over the length of the apprenticeship, retaining 20% of the total cost. The retained 20% will be paid to the Education/Training Provider upon completion of the apprenticeship.

It is estimated the NHS in England will contribute £200 million to the Apprenticeship Levy. The NHS in Yorkshire and the Humber will contribute £20+ million to the Apprenticeship Levy and with the 10% top up from HMG, the overall total projected to be available to fund Apprenticeships in this region is £22+ million in this FY. Moving forward into FY 18/19 this will mean the NHS could potentially allocate over £2 million to supporting Apprenticeships in Primary and Social Care including Third Sector employers (see further comment below).

The specific details of the Apprenticeship Levy contributions this FY by NHS service providers within Yorkshire and the Humber, as provided by them to HEE YH, can be found in the STP/LWAB Apprenticeship charts provided further in this report. For those employers who do not contribute to the Levy, they can still access Apprenticeship funding through the Co-investment scheme. In support of SME’s, HMG will pay 90% of the training cost up to the maximum funding band for the Apprenticeship.

The Government has created 15 funding bands which set the maximum amount of either Government or levy funds which can be used for a single apprenticeship. Further details of the funding bands are contained in the document below.

 

 

HMG will provide additional funding (£1,000 per apprentice) to those employers who recruit Apprentices between 16 and 18 years of age. This funding will be paid to employers via their selected education/training provider.

Other additional funding (£1,000 per Apprentice) will also be provided to those employers who recruit young people (19 -24 years of age) who have an Education and Health and Care Plan provided by a Local Authority or who have been in the care of a Local Authority.

Again this funding will be provided to the employer via their education/training provider. Full details of these additional funding opportunities are contained in the Skills for Health Guidance document embedded into this report at page 4.

In the first year of the levy (FY 17/18), those employers contributing to the Levy can only use the funds in their Apprenticeship Service account to pay for apprenticeship training and assessment of their own employees.

It is proposed from April 2018, levy paying employers will be able to use up to 10% of their levy funds to train apprentices of other employers within their ‘supply chain’. Thus employers in the NHS will be able to fund the training of apprentices within Primary and Social Care including the Third Sector.

As part of the Apprenticeship Reforms, a greater range of Apprenticeship standards linked to Higher and Degree Apprenticeships will become available. Thus Apprenticeships will be offered from level 2 up to level 4 for Higher Apprenticeships. A Degree Apprenticeship includes a Degree (e.g. BA, BSc, MA, MBA etc.) as a mandatory component of the Apprenticeship.

The Enterprise Act 2016 has imposed an Apprenticeship target for all public bodies that have 250 or more employees in England and the targets are based upon 2.3% of the headcount. The Department for Education (DfE) has written to employer Chief Executives to announce their specific targets.

Details of the Apprenticeship targets set by the DfE for local NHS service providers and forwarded by them to HEE Yorkshire and the Humber (HEE YH) can be found within the STP/LWAB Apprenticeship charts provided later in this report.

More specific details on the Apprenticeship Levy can be found in the Guidance document produced by Skills for Health.

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