JTL welcomes changes to apprenticeship funding

01 April 2019

JTL has welcomed changes announced by Government to apprenticeship funding.

The Apprenticeship Levy will have been in place for two years in May 2019 and affects employers with a total pay bill of more than £3 million. However, employers with a lesser pay bill do not have to pay the apprenticeship levy, but make a financial contribution “co-investment” contribution. The Chancellor has announced that for new starts from 1st April 2019, the rate of co-investment is falling from 10% to 5% - up to the funding band limit – so it will cost employers less to take on an apprentice. Government funding of 95% will therefore be provided to cover the remaining costs. This also applies to any levy-paying employer who wants to invest more in apprenticeship training than they hold in their apprenticeship service account. All apprenticeships started before 1st April 2019 will continue to require the 10% co-investment rate, with government funding covering the remaining 90% of the cost.

The small employer co-investment waiver remains in place. This stipulates that employers with less than 50 employees get 100% government funding up to the maximum funding bands if the apprentice is aged 16-18, or is 19-24 years old and has previously been in care or who has an Education, Health and Care plan provided by their local authority.

Employers with a total pay bill of over £3 million are required to pay the apprenticeship levy. These organisations can transfer any unused funds in their account to employers who want to receive a transfer – perhaps, but not necessarily, companies that the larger company works with in their supply chain or sub-contractors working alongside the larger company. From 1stApril the amount they can transfer to other companies from their fund increases from 10% to 25% of the annual funding in their apprenticeship service account. The transfer amount will cover 100% of the eligible training and assessment costs, up to the funding band maximum, of the apprenticeship standard.

JTL’s Director of Policy and External Relations is Caroline Turner: “We welcome any changes the Government chooses to make that encourages take up of apprenticeships and the additional 5% the Government is willing to contribute will clearly be helpful to companies that would otherwise be asked to pay 10% towards the cost of training their young people. We also hope that the change in the transfer of unused funds might free up additional funding that large companies will see as a positive opportunity to help smaller employers with their training and increase the uptake of apprenticeships as well.”

Caroline Turner - JTL’s Director of Policy and External Relations

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