Management Information Sheet
Apprenticeship Levy 2017
The government is introducing a new Apprenticeship Levy from April 2017.
What is the Apprenticeship levy?
It is a new Government funding initiative for businesses and public sector bodies to increase the level of investment in skills and training. Employers will be charged a mandatory levy to fund apprenticeship training in England.
Who has to pay it?
All employers with a pay bill of over £3 million a year will have to pay 0.5% of their pay bill as levy. These employers will receive a £15,000 allowance from the government, which will be subtracted from their levy payment.
E.g .An employer has an annual pay bill of £5m. They will need to spend £10k on the levy (levy sum: 0.5% of £5m = £25k. Subtract the levy allowance: £25k - 15k = £10k annual levy payment. This means this employer would have £10k to spend on apprenticeships every year plus a 10% monthly top up from the government. |
NB. The funding can only be spent on the training element of the apprenticeship, it cannot be used for salaries.
What's the purpose of an apprenticeship levy?
The intention is for employers to access the levy to pay for apprenticeships, which will include professional development up to Masters level and will not be restricted to younger or new staff. Apprenticeships are intended to allow for development of new skills that will enable an employee to move on to the next level in their career. Does my school/academy have to pay the levy?
The local authority's levy contribution will include the pay bill for those maintained schools where the local authority has residual employer responsibilities (community and voluntary controlled schools). Discussions are ongoing as to how the schools' share of that contribution will be managed. A Final Guidance Document is yet to be issued.
For Community and VC schools, the local authority expects to have one online levy account which should be accessible in January 2017. The Final Guidance Document will explain how this will be administered.
Foundation, VA schools, academies and multi academy trusts with a pay bill of over £3 million will also have to pay the levy.
Foundation, VA schools, academies and multi academy trusts with a pay bill of under £3 million who want to offer apprenticeships will be able to access funding which only requires them to pay 10% of the training costs of each apprenticeship. The government will pay the remaining 90%.
Can I access funds from the levy?
Access to the funding is through an online Digital Apprenticeship Service. Employers can access the funding for apprenticeship programmes (training costs only, not salaries.) The money must be used within 24 months, on a "use it or lose it" basis. If an employer spends all the funds in their account but still wants to offer more apprenticeships they will only need to pay 10% of the training cost of any further apprenticeships. The government will pay the remaining 90%.
When does it begin?
The first levy payment will be in May 2017 and will be paid through PAYE alongside income tax and National Insurance.
How is the levy paid?
Employers who pay the levy will have an HMRC digital account set up and can access their funding from here. The government will top up the amount in the account by 10%.
How can I use apprenticeships in my school/academy?
There are already in place accredited apprenticeship 'pathways' for teaching assistants, business and administration staff, ICT staff and facilities staff . These are either:
- apprenticeship frameworks - see here
or - newer standards that have been designed by employers ( see here)
Schools/academies may also choose to work together to identify a new apprenticeship standard that they would like to offer from their funding. The Teaching Schools Council is proposing the first apprenticeship for teachers.
Community and VC schools must select a training provider from a procurement framework that is being put in place. Other schools and academies in Norfolk can access this if they would find it helpful.
Next steps
The levy will be discussed at the next Schools Forum on December 14th.
Where the local authority has the employer role in schools, further communication will follow as soon as the local authority has made a decision regarding schools' share of the levy contribution and funding needed to administer the levy. Regardless of the outcome you will have access to funding for apprenticeships so a review of your learning and development strategy may be a consideration for you.
Where the school, academy or trust is the direct employer of staff, and where the pay bill is over £3million, the levy will be paid by the employer. A review of your learning and development strategy may be a consideration for you.
For schools and academies that buy an HR and payroll service through Educator Solutions, further information on practical arrangements will follow. Schools and academies that purchase HR and payroll services from another provider will need to talk to their providers about those arrangements.
Further communication will follow once the Final Guidance document is issued. In the meantime links to further information can be found below.
Where can I find more information?
The latest details from the DfE can be found here. /www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work
Information regarding Apprenticeships in Norfolk can be found here www.apprenticeshipsnorfolk.org