New apprenticeship funding to transform investment in skills

How apprenticeships will be funded as part of the drive to help millions get the skills they need for a successful career.

The government has today (25 October 2016) set out how apprenticeships will be funded as part of the drive to help millions get the skills they need for a successful career and make Britain a country that works for everyone.

Apprenticeships give people more control over their lives and can be the difference between just about managing and pursuing a skilled, long-term career. The government wants to give everyone this opportunity, regardless of their background or where they live, which is why we are giving more support for 16- to 18-year-olds and those from disadvantaged areas.

The funding policy will underpin the new apprenticeship levy, which will deliver much needed investment in the skills we need to change the lives of millions.

The government will continue to work with employers and providers as it introduces the reforms, to help ensure we transform our country’s skills for the benefit of all.

Main measures confirmed today:

• more support for younger apprentices and disadvantaged people: 100% of training costs will be paid by government for employers with fewer than 50 employees who take on apprentices aged 16 to 18 years old. This will also apply to smaller employers who take on 19- to 24-year-olds who were in care or 19- to 24-year-olds with an education and health care plan

• £1,000 each from government to employers and training providers who take on 16- to 18-year-olds and 19- to 24-year-olds who were in care or who have an education and health care plan

• providers that train 16- to 18-year-olds on apprenticeship frameworks will be given an additional cash payment equal to 20% of the funding band maximum in order to help them to adapt to the new, simpler funding model

• 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, equalling around one third of all apprentices. It is vital that we make sure that these funds are being invested in the right way, which is why we will conduct a fuller review into how to support individuals from all backgrounds into apprenticeships in future. This will look at the support employers should receive, as well as providers, and conclude next year.

More flexibility for employers:

• longer for employers to spend funds in their digital account, now with 24 months before they expire, an increase from government’s original proposal of just 18 months

• a commitment to introducing the ability for employers to transfer digital funds to other employers in their supply chains, sector or to apprenticeship training agencies in 2018, with a new employer group including the Confederation of British Industry, Federation of Small Businesses, British Chambers of Commerce, Charity Finance Group and EEF - the manufacturers’ organisation - to help government develop this system so that it works for employers

• more funding for STEM apprenticeship frameworks and higher pricing of apprenticeship standards to support improved quality, and providing greater flexibility to train those with prior qualifications. This will support the industrial strategy and provide wider opportunities for more individuals to develop new skills

Skills Minister Robert Halfon said:

"Apprenticeships work. The reforms we are rolling out will guarantee support from employers and government, so that millions of people can get the apprenticeships, skills and jobs for the future.

"Our apprenticeship levy will boost our economic productivity, increase our skills base and give millions a leg up on the ladder of opportunity - over 90% of apprentices currently go into work or further training. Making Britain a world leader on apprenticeships is essential if we truly want a country that works for everyone."

To ensure higher-quality apprenticeships, the government has also introduced a new register of apprenticeship training providers, which opens today. All providers on the register will have to pass quality and financial tests. Those with an ‘inadequate’ Ofsted rating for apprenticeship provision will not be eligible to apply to the register.

The new apprenticeship funding policy was outlined in August. It will underpin the levy which will be paid by employers will a pay bill of more than £3 million and will put the funding of apprenticeships on a sustainable long-term footing so we can support opportunities for all.

The measures announced today are the first steps in upskilling the nation by giving millions a leg up on the ladder of opportunity to high-quality jobs, and giving employers the skills they desperately need.



Department for Education
The Rt Hon Robert Halfon MP