Government presses on with its Apprenticeship Levy plans
27th October 2016
In line with its commitment to implement new apprenticeship arrangements from next May, a raft of documentation was published on 25 October 2016 on GOV.UK. Publications from the Department for Education (DfE) and the Skills Funding Agency (SFA) set out in considerable detail how levy and apprenticeship training will interact as the Government looks to drive up both quality and quantity in apprenticeships.
- Apprenticeship Funding in England from May 2017
- Supporting quality and employer choice through the new Register of Apprenticeship Training Providers
- Three separate rules and guidance documents for levy paying employers, Training Providers and employers wishing to be registered as Training Providers.
The rules and guidance documents are issued as drafts for consultation. There remain concerns for employers and Training Providers around timescales for implementation and the complexity of the proposed arrangements which bring into play multiple relationships for the employer to manage.
There are a range of actions to be completed by the Government in the run-up to implementation next May. The timetable that DfE and SFA expect will be followed is:
|25th October 2016||Applications to be included in the new Register of Training Providers. All Training Providers will be expected to follow the procedures for registration. This includes employers who wish to deliver any element of the training to be provided off-the-job.|
|25th November 2016||Closing date for first wave of Training Provider applications – the SFA will assess these published criteria to ensure capability and capacity to deliver.|
|January 2017||First date for employers to register for digital accounts.|
|March 2017||HMRC to produce payroll calculations establishing by employee postcodes the percentage of employee payroll associated with English located employees. Levy contributions will reflect this calculation.|
|May 2017||The new register of apprenticeship Training Providers comes into force.|
|May 2017||First PAYE return to HMRC reflecting the application of the levy where the employer is subject to levy.|
|May 2017||Apprenticeships starting from 1 May will operate on the new apprenticeship model.|
What should I be aware of in the Government’s proposals?
Highlights to be found in the guidance documents just published includes:
- Continued confidence that the system can go live in May 2017.
- Digital credits held by employers will expire after 24 months and not 18 months (this is helpful in giving employers more time to implement apprenticeship training arrangements).
- New proposals for the benefit of small scale (under £100k annual revenues) Training Providers allowing them to continue their business activities without the need to appear on the register of apprenticeship Training Providers.
- Additional funding on a transitional basis for Training Providers working predominantly with the 16-18 years age band (and for care leavers and those who have an education, health and care plan) to avoid financial disadvantage from the new funding arrangements.
- Greater recognition of the benefits for many apprenticeship schemes of having the ability to sub-contract to specialist providers with more freedom to do this than previously anticipated. Specialist providers may register as sub-contract only providers but annual revenues under this status must remain below £500k.
- Clarity around what will count as allowable expenditure against which claims will be permitted. A long list of what is eligible and what is ineligible has been produced.
How should employers react to this new information?
By pressing on with plans to take as much advantage of the scheme as the employer has the capacity and willingness to take must be the answer. Setting up apprenticeships is not necessarily straight forward. Care will need to be taken to bring together, in an effective way, the different work and off the job elements of the apprenticeship that meets the requirements of the employer’s selected assessment body.
Many employers will wish to have the ability to self-deliver – not necessarily all but possibly some of the off-the-job training element. To secure the funding of this requires an application to be made to be included in the Training Provider register. One may wonder whether the SFA will have the capacity to administer all that is expected of it so early application will be advisable.
Training Providers will want to move quickly to establish their place on the register to ensure clarity as to their status when selling their services to employers. Marketing to employers (as opposed to students directly) will require different strategies.
How we can help
Within Ward Hadaway we have tracked this Government project which has developed slowly but surely to date, participating in the debate and preparing for an implementation period that may prove to be uncomfortably short.
We plan to provide commentary on a number of facets of the levy and training requirements over the coming months.
If you would like to start a conversation with our team, or have any questions relating to the above, please contact us.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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