Types of Apprenticeships and their requirements
Apprenticeship Framework (Being replaced by Apprenticeship standards over the next few years)
- Competency element (Typically NVQ)
- Knowledge element (Typically a nationally recognised qualification)
Apprenticeship Standards (being introduced to replace Apprenticeship frameworks)
Content and learning requirements vary and could include:
- Knowledge element (Typically knowledge modules or a qualification)
- End Point Assessment – assessment requirements will vary and could include:
- Interview with assessor
- Project (up to one week duration)
- All will require an element of synoptic assessment
Frameworks and Standards will both require English and Mathematics competencies.
In April 2017 the government is introducing a levy on employers with an annual salary bill of more than £3m to fund Apprenticeships. Employers with an annual salary bill of less than £3m will be subject to simplified funding rules.
With effect from 1st May these changes will apply to any Apprenticeship starting from this date.
Each framework and standard will be allocated a single funding band, see table below. Employers and training providers will agree a price for the training required within the band.
There will be no age restrictions on who can start an Apprenticeship. There is a bonus payment of £1,000 for a 16-18 year old apprentices, 19-24 year old care leavers or those with a local authority education, health and care plan
The government will fund, directly with the provider all required English and Mathematics training costs up to Level 2.
For employers who do not pay the Apprenticeship Levy
- Employers will contribute 10% of the agreed price of the Apprenticeship training. This is called co-investment with the government contributing the remaining 90%.
- In the case of employers who agree with the training provider training costs in excess of the funding band, the additional cost is incurred by the employer.
- Employers with less than 50 employees will not contribute to training costs for 16-18 year old apprentices, 19-24 year old care leavers or those with a local authority education, health and care plan, up to the funding band limit.
Additional Age Grants of £1500 per apprentice are available for employers with less than 50 employees and apprentices following an Apprenticeship framework (these are not available for apprentices on Standards)
Apprentices must be aged 16-24 years at the start of their Apprenticeship which must have commenced on or before 31 July 2017.
The age grant is only available in respect of a new recruit to the employer and not an existing employee.
There is a maximum of 5 grants per employer.
Funding Apprentices with Prior Qualifications
- An employer can train any eligible employee at a higher level than a qualification they already hold, including a previous Apprenticeship
- An employer can train an individual on an Apprenticeship at the same or lower level than a qualification they already hold providing this allows the individual to acquire substantive new skills and the content of the training is materially different from any prior training or a previous Apprenticeship (further guidance is to be issued)
Recruiting an apprentice
- Speak to one of the Carshalton College employability professionals
- Create a job description (template provided by Carshalton College)
- Identify potential mentors
- Automatically advertised on National Apprenticeship website and Carshalton College website
- Employer should advertise position in usual way
- All applicants to National Apprenticeship & College website will be screened
- Shortlist sent to employer
- Employer interviews applicants in usual way
- Sign-up day arranged at workplace
- Start at employer before starting college
For employers who pay the Apprenticeship Levy
The levy will be set at 0.5% of the employer's pay bill. It will only be paid on any pay bill in excess of
Employers will have an allowance of £15,000 to offset against their levy payment.
How much will the levy cost your business ?
How much will you want to use on Apprenticeship training?
- Calculate your total pay bill (the total amount of employees’ earnings which are subject to Class 1 N.I. contributions).
- Calculate 0.5% of your total pay bill.
- Subtract the allowance of £15,000 (only one levy allowance payable within a group of companies).
- Levy payments commence in May 2017
- Payable in your usual monthly payment to HMRC.
The total pay bill includes:
- Pension contributions
- NOT benefits in kind.
Apprenticeship Levy payments are allowable for Corporation Tax.
How much will the levy cost your business ? Two worked examples
Annual pay bill £5 million
x 0.5% = £25,000
Minus £15,000 allowance
= Annual levy payment £10,000
Annual pay bill £20 million
x 0.5% = £100,000
Minus £15,000 allowance
= Annual levy payment £85,000
The 10% “top up” in practice
Getting out more than you put in
Employers who pay the levy and are committed to apprenticeships training will be able to get out more than they pay in to the levy.
The government will apply a 10% top-up to monthly funds entering levy paying employers digital accounts, for apprenticeship training in England, from April 2017.
- Employer has £12,000 annually entering their levy account
- Monthly accounting funding = £1,000
- Top-up: 10% x £1,000 = £100
- Levy monthly account increase: £1,000 + £100 = £1,100
- £13,200 (£1,100 x 12) annually to spend on Apprenticeships
Digital Apprenticeship Service (DAS)
The Digital Apprenticeship Service is the mechanism whereby employers and training providers will be able to manage payments in respective of Apprenticeship taining.
- Registration is available from 1 January 2017.
- From March 2017 employers are able to view the proportion of their employers located within England (updated quarterly thereafter).
- The Apprenticeship Levy commences 6 April 2017.
- Funds will appear in the Digital Account before the end of May 2017 for the levy paid during April 2017(and each month thereafter).
- When training has started payments to the training provider will be taken monthly in accordance with the payment schedule agreed.
- Funding via the levy can only be used for Apprenticeship training.
- For the first year these funds will only be useable for the training of an organisation’s own employees (it is the government’s stated intention for the future to allow levy paying employers to transfer up to 10% to other employers in their supply chain).
- Funds will expire after 24 months if not used to train apprentices.
Recruiting an apprentice
Step 1 - Plan your Apprenticeship programme
- Estimate how much funding you will have to spend on Apprenticeship training.
- Identify your training need.
- Talk to the College’s Curriculum and Apprenticeship Recruitment Team.
Step 2 – Choosing your Apprenticeship training and assessment
- Consider the type of training (subject, framework/standard and level).
- The training provider and end point assessment.
- Consult with the College’s Curriculum Team and find out about the nature of the Apprenticeship training available.
- Negotiate the price and terms of payment for training.
Step 3 - Advertise the vacancy to recruit an apprentice
- The College will support the creation of a job description and person specification
- The College will post the Apprenticeship opportunity on the National Apprenticeship website [and other locations including the College website]
- The College will support with shortlisting
Step 4 – Manage the funding for your apprentice
This will be managed through the Digital Apprenticeship Account – see above.
Step 5- Start a new Apprenticeship contract
- Written agreement is entered into[with training provider/College].
- Agree a payment schedule with the training provider including payment methods and timing.
- The Commitment statement which describes “who will do what” and is signed by the employer, the apprentice and the training provider.
To recognise the extra costs involved in supporting some apprentices the government will make a payment of £1,000 to employers when they train:
- 16-18 year olds
- 19-24 year old care leavers or those with a local authority education, health and care plan;
This will NOT be paid via the employer’s Digital Apprenticeship Service account.
The government will fund the support for English and Mathematics training for relevant Apprenticeship situations.