What you can spend apprenticeship funding on – all employers

Funds in your digital account, and funding provided by the government through co-investment, can only be used towards the costs of apprenticeship training and end point assessment. This must be with an approved training provider and assessment organisation.

Both levy and non-levy paying employers will have access to the new Digital Apprenticeship Service.

It can’t be used on other costs associated with your apprentices or wider training effort. For example wages, statutory licenses to practice, travel and subsidiary costs, managerial costs, traineeships, work placement programmes or the costs of setting up an apprenticeship programme.

Apprenticeship training started before 1 May 2017 – all employers

Apprentices who have been accepted on to an apprenticeship programme before 1 May 2017 will be funded for the full duration of the apprenticeship under the terms and conditions that were in place at the time the apprenticeship started.

This will be the case for apprentices following programmes underpinned by both apprenticeship ‘frameworks’ and new ‘apprenticeship standards’. Where the apprenticeship requires you to make a payment to the provider or to the Skills Funding Agency, this will continue at the same rate. If you pay the apprenticeship levy you will not be able to use the funds in your digital account to pay for these apprenticeships.

How apprenticeship standards will be funded from 1 May 2017

From 1 May 2017 the way the government funds apprenticeships in England will change. Some employers will be required to contribute to the new apprenticeship levy, and there will be changes to the funding for apprenticeship training for all employers.

Employers will be able to choose the training they’d like their apprentices to receive, an approved training provider and an assessment organisation using the registers available on the new digital apprenticeship service. Help with this is available from the National Apprenticeship Service.

All existing and new apprenticeship frameworks and standards will be placed within a funding band. The upper limit of each funding band will cap the maximum amount of digital funds an employer who pays the levy can use towards an individual apprenticeship. The upper limit of the funding bands will also cap the maximum price that government will ‘co-invest’ towards, where an employer does not pay the levy or has insufficient digital funds and is eligible for extra support. It will be up to employers to negotiate prices with providers, within these funding limits. The same funding bands will apply to all employers paying for apprenticeship training and all providers delivering training.

Extra support for employing 16- to 18-year-old apprentices – all employers

The government recognise that there are some additional costs associated with supporting younger apprentices, young care leavers and young adults with additional learning needs. It is therefore currently proposed to make an additional payment of £1,000 to employers and a further £1,000 payment to training providers to help with these extra costs and ensure all individuals have the opportunity to benefit from an apprenticeship. Further detail on this is expected to be confirmed in October 2016.

It is also proposed that when employers take on a 16 to 18-year-old on an apprenticeship framework or standard, they receive £1,000 as an incentive payment to help meet the extra costs associated with this. This would be paid to employers in two equal instalments at 3 months and 12 months. Initially, these payments will be made to employers via their training provider, who will pass the money on.

Funding for English and Maths training – all employers

All apprentices have to meet a minimum standard in both English and Maths up to level 2 (i.e. Grade ‘C’ or above GCSE). If your apprentices don’t already have these, they will be required to undertake English and/or Maths as part of their apprenticeship. You will need to work with your provider to identify which of your apprentices require this training.

Providers will be paid directly from government for the level 1 and 2 English and Maths training they provide to your apprentices. You won’t be asked to pay for this.