Apprenticeship Levy Update

Transcription

1 Apprenticeship Levy Update Webinar: 08 September 2016 Apprenticeship Levy update Webinar: 05 May 2016 James Hammill Director BPP Professional Apprenticeships James Hammill Director BPP Professional Apprenticeships James Hammill Director BPP Professional Apprenticeships

2 Agenda Background Apprenticeship Levy recap 05 Who can it be spent on? 06 What can it be spent on? 07 Summary: New funding information 09 New Apprenticeship Standards 10 Further updates 11

3 Action is needed to address current economic trends UK productivity lags behind other developed economies and employers are investing and employers less in training are investing less in training 200, , , , , ,000 80,000 60,000 40,000 20,000 0 Number of employees who worked fewer hours than usual because they attended a training course away from their workplace Meanwhile relative social mobility has stagnated or declined over recent decades The UK has low levels of intergenerational social mobility compared to some other 3 developed countries 3

4 Why are apprenticeships the solution? Structured training programme to develop skills the employer and employee needs and employers are investing less in training BENEFITS Include Professional Qualifications/Degree/Masters Include Skills and Behaviours agreed by employers EMPLOYER Professionalised workforce Staff development investment Develop future skills required Improved retention EMPLOYEE Career not a job Improved lifelong earning capacity 4 Source: GDP chart ONS, International Comparisons of Productivity, 2014.

5 Apprenticeship Levy recap Levy on UK employers will fund growth in the apprenticeship programme. In parallel, employers will be given more influence over how apprenticeships are designed and paid for, so that they focus on the Skills, Knowledge and Behaviours that are required of the workforce of the future. Growth in apprenticeships will open up opportunities to individuals from all backgrounds and all parts of the country, giving more people the chance to pursue a successful career. The levy will come into effect on 6 April 2017, at a rate of 0.5% of pay bill, paid through PAYE. It applies to all employers in all sectors. All employers have an allowance of 15,000 to offset against their levy liability. The levy allowance is not a cash payment and cannot be used to purchase apprenticeship training. The allowance means that only UK employers with an annual pay bill of more than 3 million are liable to pay the levy. That s 2% of employers. Employers in England who pay the levy will be able to get out more than they pay into the levy, through a 10% top-up to their digital accounts.

6 Who can the Apprenticeship Levy be spent on? Aligned to an approved apprenticeship New to role Employees Existing staff skills gap There are rules governing what an apprenticeship is. The main ones are: the apprentice must be employed in a real job; they may be an existing employee or a new hire the apprentice must work towards achieving an approved apprenticeship standard or apprenticeship framework the apprenticeship training must last at least 12 months the apprentice must spend at least 20% of their time on off-the-job training Level of qualification irrelevant

7 What can the Apprenticeship Levy be spent on? Digital funds and government funding can be used for: apprenticeship training and assessment against an approved framework or standard with an approved training provider and assessment organisation up to the funding band maximum for that apprenticeship Digital funds and government funding can not be used for: wages travel and subsistence costs managerial costs traineeships work placement programmes the costs of setting up an apprenticeship programme

8 Apprenticeship rebranding staff development The Apprenticeship Levy can be used to train new hires and existing employees: New hires Existing employees School leavers Graduates Business as usual recruits Career changes Professionalise workforce Returners Management development

9 Summary: New funding information released August year old incentive payment ( 1000 to employer, 1000 to provider) Highest level of qualification held by the individual no longer a barrier 15 funding bands for Frameworks and Standards Levy payers can transfer 10% funds from 2018 to other employers Non-levy paying employers won t use DAS to pay for training until 2018 Co-investment will be 10% employer 90% government Government pay for English and Maths training Subcontracting changes Reduced funding for Frameworks Access government support for training employees whose main workplace is England

10 Government Training Provider Non-levied employer Levy paying employer How the funding system will work 10% Top up HMRC collect levy (PAYE) Employer views funds in digital account to spend in England Employs apprentice and commits to training Receives training for apprentice Payments to providers taken from digital account Unused funds expire after 18 months Employs apprentice and commits to training Receives training for apprentice Employer pays for proportion of cost direct to training provider SFA pays govt proportion of costs to the training provider Registers with SFA Commits to provide apprenticeship training Provides training to apprentice Provides info via ILR to SFA that training has taken place & that employer has made contribution Paid by SFA and balance by employer Pass data on levy payments from HMRC to DfE Employer and Provider Identity Assurance Timely data on training 10 Check training is complete If funding unlocked: pay provider

11 What new Apprenticeship Standards are available? Over 170 Apprenticeship Standards (created by Trailblazers) currently developing over 400 standards. Over 40% are higher/degree level 246 standards have been published Guidance available at: List of standards developed / in development so far available at:

12 When further information will be available? October 2016 Information about apprentices starting from May 2017, including: Final levels of funding Government support Additional support for 16- to 18-year-olds English and maths payments Final detailed funding and eligibility rules December 2016 Information about further employer guidance from HMRC on how to calculate and pay the apprenticeship levy.

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