Questions remain on making the Apprenticeship Levy work for tech companies

26 Apr 2016 03:24 PM

New guidance from Business Department reveals a degree of new information of levy implementation.

Following the announcement of scope by the Chancellor in November 2015, employers have been anticipating further information on the Apprenticeship Levy. Last week, the Department for Business, Innovation and Skills published further information on the Levy.

While the tech industry will be pleased to see that the Government has delivered against its commitment to ensure the Levy is an employer-led initiative, many will be disappointed by the lack of definitive answers to key questions raised by the tech sector. techUK would have also liked to have seen further assurance digital skills would be a core component of all newly created apprenticeships, preparing our young people for jobs of the future. techUK are looking to government to address these issues when more detailed information is published in June.

The guidance document sets out the following important new information:

• The Levy will officially be introduced on 6 April 2017
• Employers are able to create their digital apprenticeship service accounts from January 2017
  • The first time employers will see any funds in their account will be late May 2017
• The amount entering your digital apprenticeship service account will be how much you have available to spend on apprenticeship training in England
  • The digital apprenticeship service will only support the English apprenticeship system – and to calculate how much employers will spend through the English system, BIS plans to use data that is already available about the home address of employees. They will use that data to work out what proportion of your pay bill is said to employees living in England & this assessment will take place in early 2017.
• Funds in the digital account will expire after 18 months
• The government has not yet made a decision about directing funds in the account to another employer; however in the first year you will only be able to use the funds in your account to pay for your own employees
  • Further assessment of the approach is currently being undertaken, and more information will be provided in June 2016.
• By 2020, all employers will be able to use the digital apprenticeship service to pay for training and assessment of for apprenticeships
• Frameworks will be phased out by 2020, as the system moves over to employer-led apprenticeship standards
• Funds in your digital account can only be used towards the cost of apprenticeship training and end point assessment & cannot be used on any other costs associated with your apprentices or wider training efforts
• Employers wishing to use funds to pay for apprenticeship training that they provide and manage themselves will need to be an approved training provider
• A set of detailed rules exist to define what employers can use apprenticeship funding for; these are currently being reviewed
• Further information will be available in June, October, and December 2016

techUK is seeking further clarification on the following issues:

Higher level apprenticeship. No further information was provided on provisions being put in place to ensure the quality of apprentices rather than quantity.

Pace of accreditation. techUK welcomes the move to remove frameworks by 2020, however there is no further information of the streamlining of the accreditation process

Employer In-House Training. Although we welcome the recognition that some employers will choose to train their apprentices in-house, there is a lack of further information and guidelines, as well as no mention of additional administrative costs of in-house training.

Shifting funds into supply chain. While the document addresses that this may be a possibility, further information will not be provided until June.

Administrative costs. The document did not address the administrative burden employers will face in the implementation of the Levy, nor did it provide any indications of any allowances.