HR · 21 December 2017

Government puts £500m into apprenticeship training for non-levy paying employers

Since April 2017, firms with a payroll above £3m have been paying into the Apprenticeship Levy
Since April 2017, firms with a payroll above £3m have been paying into the Apprenticeship Levy

The government has started to deliver funding worth almost £500m to apprenticeship training providers in its push to create more placements at small businesses.

The Education and Skills Funding Agency (ESFA), an executive body sponsored by the Department for Education (DfE), is today (21 December) awarding contracts to hundreds of organisations offering in-work training placements for employers not paying the Apprenticeship Levy.

By funding training providers, the government hopes to enhance provision of “high quality” apprenticeships across the country and in each business sector.

In early January, the Find Apprenticeship Training online portal will be updated with a list of providers offering placements to employers with a payroll under £3m.

Since April 2017, employers with a payroll of over £3m have been charged 0.5 per cent on annual bills towards the apprenticeships levy, to fund the government’s target of three million new apprenticeships by 2020.

What smaller employers need to know about the Apprenticeship Levy

According to the DfE, the contracts are being awarded following a “rigorous” procurement process, designed to ensure sustainable provision of training for employers over the next 15 months. Over 1,000 training providers are said to have applied for funding.

After the initial contract period has finished, participating providers will be able to bid for more funding if they can demonstrate evidence of demand from business owners, and subject to ESFA rules and availability.

To create stability for business owners when providers have been unable to access further funding, contracts will be extended by three months to allow apprentices to complete existing training.

Commenting on the new round of apprenticeship funding, government skills minister, Anne Milton, said small business owners would now benefit from in-work training schemes.

“We are investing in our workforce to make sure there is no barrier on anyone’s ambition and that employers have the skilled workforce they need. The investment announced today will ensure that all businesses are able to benefit from high-quality apprenticeship training provision,” Milton said.

Despite the government’s push to create more apprenticeships, the number of in-work training placements at UK businesses have plummeted since the introduction of the Apprenticeship Levy.

According to DfE figures, apprenticeship enrolments dropped 59 per cent in the final three months of the 2017 academic year. In the three months to July, only 48,000 placements were entered, compared to 117,800 in the same period in 2016.

Find out how the Apprenticeship Levy could help bring disabled talent into the workforce

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ABOUT THE EXPERT

Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.

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