What can employers spend apprenticeship levy funding on?

Employers can 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, from April 2018, a levy-paying employer will be able to transfer up to 10% of its annual levy credit to another employer, for example an organisation in its supply chain. The receiving employer must use the funds for training and assessment for apprenticeship standards (not frameworks). The transferring employer must agree to the individual apprenticeships to be funded.

Employers cannot 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 cannot use the levy to fund apprentices who had already been accepted onto an apprenticeship programme before the new system for apprenticeship funding in England came into effect on 1 May 2017.

The Government has published guidance for employers on the apprenticeship levy and the funding system. It has also published details of its funding policy for England, including funding bands that apply for existing apprenticeship frameworks and apprenticeship standards from 1 May 2017.