The Government has pledged to create three million apprenticeships by 2020 with a special focus on higher and degree level apprenticeships offering education right up to Masters degree level.
From April 2017, large employers will pay a levy of 0.5% of their payroll bill to create a £3 billion funding pot to pay for these apprenticeships.
They will then be able to draw down the value of their contribution – plus a 10% top-up donation from the Government - in vouchers which can be used to pay for apprenticeships.
Use them or lose them! Levy vouchers expire if they are not spent within 2 years. A firm paying a £100k levy would recoup the full value with just four degree apprenticeships.
Vouchers can be spent on training, assessment and certification. Employers themselves pay the apprentice’s wages.
Small employers will not be able to access levy funds initially. From May 2017, a new funding model will allow smaller businesses to access funding at a 90% funded rate meaning that apprenticeships have never been as accessible.
Employers who have spent all of their levy but who want to offer more apprenticeships will receive Government support at the same generous rate as small employers.
Additional incentive payments may also be available depending on eligibility.