Introduction to the Apprenticeship Funding Reforms
From May 2017 the way apprenticeships are funded is changing. The full policy document was published in October 2016 and can be viewed here Why the reforms are necessary Apprenticeships transform lives and are vital in making this a country that works for everyone. As well as giving young people the chance to build a better future by taking their first step on the employment ladder, apprenticeships give those already in work the opportunity to progress further. And for those just about managing, they can unlock a brighter future. That is why we are committed to 3 million new apprenticeships by 2020, spending £2.5bn to transform this country’s investment in skills, in our people. Apprenticeships benefit employers and individuals, and by boosting the skills of the workforce they help to improve economic productivity. But to do all this, the new apprenticeships programme needs to be underpinned by a sustainable funding system. The aim of the reforms The apprenticeship reforms will support an increase in the quality and quantity of apprenticeships so that more individuals have the chance to pursue a successful career. The Apprenticeship Levy The funding policy changes the way apprenticeships in England are paid for, underpinned by the apprenticeship levy. The levy will be paid by employers with a pay bill of over £3 million from April
- 2017. Employers who pay the levy will
be able to access a new digital apprenticeship service that allows them to spend available funds on apprenticeship training. The vast majority of employers will not pay the levy and these employers will continue to benefit from generous government support to pay for apprenticeships. Policy development Policy proposals were published in April and then in August. Throughout this time, the government engaged with employers, training providers and interested stakeholders to inform the policy development. This valuable input has shaped the final funding policy. How employers are affected by the reforms The reforms give employers more control over designing, choosing and paying for apprenticeship training. From May 2017, we are simplifying the way apprenticeships are funded in England. This will make it easier for employers of all sizes to navigate and choose the apprenticeship training they want to purchase. Funding will follow employer choice, moving away from the current provider- led model and meaning providers will have to be much more responsive to what employers need.