As a non-Levy payer, you will have an annual pay bill of under £3 million
Although you wont be paying into the new Apprenticeship Levy or using the new digital system to pay for Apprenticeship training and assessment until at least 2018, the way Apprenticeships are funded will still change for you.
Funding bands and co-investment
Every individual Apprenticeship framework and standard will be allocated to a funding band. The upper limit of the funding band will cap the maximum price that government will ‘co-invest’ towards.
The government will fund 90% of the agreed price for training and assessment, and you as the employer will pay 10%. You will be able to agree a payment schedule with us and spread your payments over the lifetime of the Apprenticeship. An example of how this might work is provided below:
- Employer chooses Apprenticeship in band 9 with a maximum price of £9,000
- Employer negotiates a price of £8,500 with their provider
- Government co-invests 90% = £7650
- Employer co-invests remaining 10%= £850
- Employer and provider agree to spread this over 10 instalments of £85
In the first year of the new system, employers will need to pay their co-investment share directly to training providers
Small employer incentive
The government recognised that smaller employers have historically played a very important role in helping young and disadvantaged people into the workforce for the first time. This is why they are continuing to pay a grant to small employers to support them in taking on new apprentices aged between 16 and 24 years of age. This is called the Apprenticeship Grant for Employers 16-24. The AGE grant scheme will continue until the end of the 2016/17 academic year.
We want to continue to support small employers to take on younger apprentices so for employers with fewer than 50 workers the government will pay 100% of the Apprenticeship training costs for these individuals. In addition to this, they are extending this offer to small employers who take on a 19 to 24 year old apprentice who was formerly in care or has a Local Authority Education, Health and Care plan.
The government will pay £1,000 to you as a non-Levy-paying employer over two equal payments at 3 months and 12 months. Initially, the payment for the employer would be made via us. Over time, they intend to move to a system where you receive this payment directly from the government.