New Government proposals for the funding of apprenticeships have been welcomed by the Skills Company, Greater Manchester’s largest training provider.  The plans are part of a major reform of apprenticeships designed to create 3m new apprenticeships by 2020, spending £2.5bn to transform the country’s investment in the skills of the future workforce.

The proposals will be implemented as the new Apprenticeship Levy is introduced in 2017, which will require companies with a pay bill of over £3m a year to pay 0.5% of their payroll costs toward apprenticeship training, whether they currently employ apprentices or not.  The money will be paid into the employer’s digital account for them to spend on apprenticeship training, and the government will provide a 10% top up into the account.

Among the measures announced are:

  • Higher funding for Science, Technology, Engineering and Manufacturing (STEM) apprenticeships and more flexibility to train those with prior qualifications
  • Longer period of time for employers to spend funds in their digital account, now with 24 months before they expire
  • From 2018, employers will be able to transfer their levy funds to other employers in their supply chains
  • There will be a 90 per cent contribution from government to the cost of training for employers who are not in scope of the levy
  • A 100 per cent contribution from the government to the cost of training for small employers, that will not pay the levy and who take on apprentices who are 16 to 18 years old, 19 to 24 year old care leavers, or 19 to 24 year olds with an education and health care plan
  • £1,000 each from government to employers and training providers when they take on 16 to 18-year-olds, 19 to 24-year-olds who were in care or who have an education and health care plan
  • A simplified system for supporting people from disadvantaged areas, to ensure the opportunity to undertake an apprenticeship is open to everyone

Jayne Worthington, Managing Director of the Skills Company, part of the Manchester Growth Company said:  “This announcement brings welcome clarity to the future funding for apprenticeships for both large and small employers.  We are particularly pleased that the support for apprentices from disadvantaged areas has been protected, as there was previously a real danger that young people from deprived areas could be excluded.”

“Larger companies who will be directly affected by the Levy really need to be planning now for how they will get the maximum return on their investment.  The funding arrangements are quite complex, and we are already working with many local employers to help them plan their recruitment and workforce development needs into the future, and they will be well placed to gain most from these new arrangements.”

“We’ll be exhibiting at the CIPD conference in Manchester on 9th and 10th November, and any employers who want to find out how the new arrangements will affect them, and start planning their future workforce needs can talk to us there, call us on 0161 233 2656 or visit www.theskillsco.com

MGC works in partnership with the Greater Manchester Combined Authority and the Local Enterprise Partnership to deliver growth and prosperity to the city region, providing the research and analysis to drive policy and delivery, raising Manchester’s profile, attracting investment, helping businesses grow and providing individuals with new skills and employment opportunities.