During this year’s Spring Statement, Philip Hammond announced changes in apprenticeship funding with an emphasis on helping more SMEs take on apprentices. The halving of co-investment was brought forward to the beginning of this financial year and the amount of funds that levy payers can transfer increases.
Co-investment increases from 90% to 95%
Small and medium enterprises that aren’t required to pay into a levy pot are only required to co-invest the cost of an apprenticeship. Up until April 2019, the percentage of the cost that the employer had to pay was 10%, this has now been halved to 5%. For example, that would mean that an apprenticeship that costs £12,000 would now cost the employer £600 – the government would then cover the remaining £11,400. Co-investment also occurs if you’re a levy payer that has used up the funds in their account. Any further apprenticeships the business would like to do would come at a cost of 5% of the original price. This doesn’t affect businesses that have 49 employees or less that take on 16-18-year-old apprentices, the apprenticeship is still fully funded by the government.
DID YOU KNOW? There’s a £1000 incentive for any employer (inc. levy payers) that hires an apprentice that is 16-18-year-olds.
Levy transfer increases from 10% to 25%
Levy paying employers have the option to transfer a portion of their unspent funds to another organisation e.g their supply chain, charities, etc. The percentage that could be transferred has increased from 10% to 25%. The benefit for a non-levy payer using levy transfer rather than co-investment is that with levy transfer 100% of the cost will be covered.
Funding amounts change for digital apprenticeships
A group of programmes have had their funding amounts reduced during the Institute of Apprenticeships’ review of the digital industries programmes.
- Digital Marketer – £11,000 (was £12,000)
- Network Engineer – £17,000 (was £18,000)
- Assistant Accountant – £8,000 (was £9,000)
- Professional Accounting Taxation Technician – £8,000 (was £9,000)
At Arch, we can confirm that the changes in funding won’t cause changes in our delivery of these programmes.