What will employers be able to spend apprenticeship levy funding on?

Employers will be able to spend apprenticeship levy funding on apprenticeship training and end-point assessment (the assessment of apprentices by an independent organisation, required before they can complete the apprenticeship), either under an apprenticeship standard or an apprenticeship framework. The funding can be spent only with an approved training provider or an approved assessment organisation.

The Government has said that it recognises that some employers would like to fund apprenticeships for other employers, for example in their supply chain. It has said that it is committed to allowing employers to transfer 10% of their funds to another employer or to an apprenticeship training agency, and that this will be introduced in 2018.

Employers will not be able to use the apprenticeship levy to fund other costs of apprenticeships or other training costs. Government guidance states that the levy cannot be spent on:

  • wages;
  • statutory licences to practice;
  • travel and subsidiary costs;
  • managerial costs;
  • traineeships;
  • work placement programmes; or
  • the cost of setting up an apprenticeship programme.

Employers will not be able to use the levy to fund apprentices who have already been accepted onto an apprenticeship programme before the new system for apprenticeship funding in England comes into effect on 1 May 2017. The apprenticeship levy itself is expected to come into force on 6 April 2017.

The Government published updated guidance for employers on 25 October 2016, on how the apprenticeship levy and the new funding system will work. It also published final details of its funding policy for England, including funding bands that will apply for existing apprenticeship frameworks and apprenticeship standards from 1 May 2017.