Apprenticeship Levy: What you need to know

This week, following an employer consultation Ukie responded to, the Department for Education has published the details of the funding rates and rules that will apply to the apprenticeship levy, which comes into force in April 2017. 

The levy is designed to create and fund new apprenticeships as part of the Government’s ongoing drive to upskill millions across the UK to ensure that they can build successful and lasting careers in a changing digital world. 

Ukie has been involved in ensuring that the new apprenticeship scheme works for the games industry, and welcomes the following measures confirmed this week:

  • more support for younger apprentices and disadvantaged people:
    • The government will pay 100 per cent of training costs to employers with fewer than 50 employees who take on 16-18 year old apprentices. This also applies to smaller employees who take on 19-24 year olds who were in care or with an education and health care plan
    • £1k each from government to employers and training providers who take on 16-18 year olds and 19-24 year olds who were in care or who have an education and health care plan
    • Providers that train apprentices from the most deprived areas on apprenticeship frameworks will continue to receive additional funding from government. More than £60 million will be invested in supporting the training of apprentices from the poorest areas in the country, which equals around one third of all apprentices. 
  • more flexibility for employers:
    • Extension of funds expiry date: Employers will now have 24 months, rather than the original proposed 18 months, to spend the levy funds in their digital accounts
    • Confirmation of the ability to transfer funds: levy-paying employers will be able to transfer up to 10 per cent of the annual value of their digital funds to other employers or apprenticeships training agencies (ATA). The government has also created a new employer working group to develop its proposals around how a transfer system can work best for employers. They will be working with government to determine the level of funds transferable and the controls needed to protect the integrity of the apprenticeship system.
  • STEM funding increase:
    • The funding bands for STEM pathways have been increased in 13 subject areas including information and communication technology, science, and mathematics. The current adult rate has been increased by 40 per cent at Level 2 and 80 per cent at Level 3 and above meaning that employers should have  greater flexibility to use funds to retrain staff with prior qualifications 
  • Greater clarity over how the levy will be calculated:
    • Contributions to the Levy will be calculated by using data that HMRC already hold about the home address of their employees. HMRC will work out what proportion of each employer’s pay bill is paid to employees living in England for each PAYE scheme. This proportion will be available to view through the digital apprenticeship service from March 2017.

Ukie welcomes the additional information provided by Government into how the apprenticeship levy will operate come April 2017. It recognises certain principles that we worked with Creative Skillset to put to Government in order to ensure that the levy supports the specific talent needs of games companies of all sizes across the UK. For instance, increasing the funding available to STEM pathways, and allowing levy-paying employers to transfer some of their funds to other employers and ATAs.  

Nevertheless, the government has not committed to allowing employers to use their digital vouchers to fund the development of new apprenticeship standards applicable to the games industry, and more needs to be done to ensure that games companies can spend their digital vouchers effectively. Ukie are continuing our efforts to maximise the games industry's value from the levy, and are working closely with a number of training providers to ensure that the apprenticeships on offer are of a high standard and capable of equipping games apprentices with the tools necessary to succeed in our highly dynamic sector. 

For more information about the apprenticeship levy or any of our Policy work, please email Marianna.