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12/05/2017

Schools must remember to use their Apprenticeship Levy

A hot topic in the news these days is the pressure that schools are under when it comes to their budget. However, this has not prevented the Government from introducing a new Apprenticeship Levy which will impact on all employers in the education sector with a salary bill over £3 million a year. This will encompass nearly all maintained schools as the relevant local authority is their employer, as well as most multi-academy trusts and some large standalone academies. 

The Apprenticeship Levy came into force on 6 April 2017, and employers will have to make monthly contributions towards the levy starting from May 2017. The amount of Levy payable is 0.5% of the employer’s salary costs (less an annual allowance of £15,000). However, the Government will top up the funds by a further 10%.  

Levy payers will be able to access their funds through a new digital apprenticeship service (which is available to register with now), through which they will be able to select their apprenticeship provider and manage their payments. 

What can the funds be spent on?

Given that a lot of schools and academies are going to be obliged to pay this levy, it is worth seriously thinking about how they are going to use the funds and identifying eligible training programmes so that they can get the most out of the money. It is particularly important that schools start considering their options as soon as possible because the funds expire 24 months after they enter an employer’s account.  

The funding can only be used to cover the cost of the training and assessment (which does not include costs such as the apprentices’ salaries), and it can only be spent with a Government approved training provider. However, there are a number of accredited apprenticeship pathways open to schools such as training for teaching assistants, the school office and school business managers. There is also the option for groups of schools or academies to get together if they would like to establish an apprenticeship standard that isn’t currently available, and work with a training provider to develop it so that they are able to spend their funding on it.  

The DfE has published a “Schools’ guide to apprenticeship reforms” which provides a useful list of available apprenticeships that are relevant to schools. You can access it here.  (If the link does not work please copy and paste the following into your browser: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/598603/Schools__guide_to_apprenticeship_reforms.pdf )

The Levy is one element of the government’s reforms to increase the number of apprenticeships to 3 million by 2020. It certainly seems as though employers, both public and private, will be forced to consider how apprenticeships can be incorporated within their organisation, or risk paying money each month on which they get no return.  

If your school or academy is obliged to pay the levy, and you require any further information or advice, then please feel free to contact Graham Irons, Employment Partner and Head of Education, by email graham.irons@howespercival.com or by telephone 01604 258003.