The way apprenticeships are funded in England is changing as of May 2017 with the introduction of an Apprenticeship Levy that some employers will have to pay. The process of deciding how this will work has in part been collaborative, with opportunities for employers and training providers to feedback.
On 27th October, an Apprenticeship Levy Conference was held in Coventry that dealt with the proposals as they stood from the last announcements in August and the most recent announcements made on 25th October that settle some of the final details that were outstanding.
System Group was present, asking the questions that employers they work with had been asking. System Group’s Business Development Director, sought clarification from the SFA representative, Una Bennett, on what support Levy paying organisations that had insufficient funds in their digital accounts to fund their apprenticeships would have – would the proposed additional funding from the government (90% will be funded by the government, with only 10% coming from the employer) be capped?
Una Bennet responded by saying that the support would be unlimited and would not be funded as an advance draw down on the employer’s future levy payments.
They followed up asking where the funding would come from – would it come from underspend from other levy payers?
Outlining details from the projections of anticipated demand, Una replied that the additional support would indeed come from other employers’ levy underspend. She confirmed that although theoretically the funding pot is finite, the SFA’s projections indicate that the levy will create a larger pot than is required to meet the anticipated demand, so employers should always be able to access whatever they need. She also confirmed that this will be reviewed once the levy is up and running should it turn out not to be the case.
They further highlighted a question that has caused concern across the logistics industry in relation to whether the funding bands (particularly at the lower levels) to which each apprenticeship had been allocated would be sufficient to deliver an effective apprenticeship programme: he asked if a review mechanism would be available to training providers to challenge the bands should this turn out not to be the case?
Una answered that any challenge would have to come from employers, not providers, and would have to evidence that those costs exceeding the funding band were genuinely allowable within the funding provisions. She added that if a provider had such concerns, they would have to bring them to the employer group and challenge through that route.
Throughout the conference, one message that came through very clearly was that the levy is definitely coming (some organisations had a view that it would not happen, or would be delayed, but Una quashed both of these notions) and that businesses need to start preparing for it now. System Group is committed to making the levy work for the logistics sector and is currently working with many organisations within the sector to help work out the best way to maximise their levy spend and use it to drive workforce development throughout their business and supply chain. System Group is keen to engage with any employer to provide assistance and guidance in relation to how the levy works, how they can maximise their levy spend, and take questions to feedback to those who are now finalising the new system.
For more information on the Levy, please visit www.system-group.com/apprenticeshiplevy