The Apprenticeship reforms were officially launched at the beginning of this month. With numerous questions about the new complex funding rules and a snap election thrown into the mix there is still an element of uncertainty surrounding the changes.
Debbie Scotton, Business Development Manager at South Leicestershire College discusses the new Apprenticeship funding rules and the impact for SMEs.
“The impact of the new funding rules will depend on the size of an organisation. There is a new tax called the Apprenticeship levy, however this will only be paid into by those whose annual PAYE bill is £3million or more.
“For organisations whose annual PAYE bill is under £3million they will not pay into the levy. These organisations will pay 10% of the cost of training and assessment of Apprentices and the government will co-invest the remaining 90%.
“These organisations will also receive a £1,000 payment if they employ an Apprentice who is: aged 16-18 at the start of their Apprenticeship or aged 19-24 and has an education, health and care plan provided by the local authority or has been in the care of a local authority
“There is also additional government support if your organisation has fewer than 50 employees. If you employ an Apprentice who meets the above criteria, your 10% contribution will be waivered and the government will pay 100% of the costs.
“This funding will coincide with the introduction of the new Apprenticeship standards. As the current frameworks begin to be phased out, these new standards, which have been designed by employer groups, will be placed into one of 15 upper limits ranging from £1,500 to £27,000. Employers and training providers will negotiate costs within these limits.
“We are working closely with small and medium organisation in the local area to support the through these changes and design an Apprenticeship training programme to meet their needs.”
Publication date: Wednesday 17th May 2017