Simpler funding system Equivalent and Lower level qualifications Funding rules Start date We propose that the new funding system comes into effect on 1 May 2017 so that levy paying employers can use funds in their digital account to pay for training from the first month they declare levy payable through the PAYE system. Simpler funding system Government currently funds apprenticeship frameworks at different rates depending on the age of the learner. We are proposing to allocate each individual framework pathway to a single funding band, regardless of the age of the learner, or geographic location. This will bring frameworks into line with the funding system for apprenticeship standards and dramatically simplify the experience of employers. STEM uplift For all STEM framework pathways we propose to increase the current government-funded adult rate by 40% at Level 2 and 80% at Level 3 and above, and then allocate these frameworks to the nearest funding band. Equivalent and Lower level qualifications We propose that employers should be able to use their funds to train individuals to undertake an apprenticeship provided the training will allow them to acquire substantive new skills, and the content of the training is materially different from any prior training or a previous apprenticeship.

Extra funding support 16-18 year olds Government intends to pay £1,000 to employers, and a further £1,000 to training providers. Employer funding will be paid through your training provider.   If an employer has fewer than 50 people working for them we will pay 100% of the apprenticeship training costs for apprentices between 16 and 18 years old at the start of their apprenticeship. Funding for disadvantaged individuals Government intends to pay £1,000 to employers, and a further £1,000 to training providers if you recruit apprentices leaving care or apprentices aged between 19 and 24 who have a Local Authority Education and Healthcare plan. Employer funding will be paid through your training provider.   Funding for additional learning support If your apprentice needs extra support to help meet additional learning needs we intend to make payments direct to the training provider of £150 per month.   Funding for English and Maths training  When employers agree with their training provider that their apprentice needs training to meet the minimum standards in English and maths (Level 1 and Level 2), we intend to provide funding to pay for the costs. We intend to make it possible for the training provider will be able to claim a flat rate of £471 from the Skills Funding Agency.

Provisional funding bands Number Band limit 1 £1,500 2 £2,000 3 £2,500 4 £3,000 5 £3,500 6 £4,000 7 £5,000 8 £6,000 9 £8,000 10 £10,500 11 £13,500 12 £16,500 13 £19,500 14 £22,500 15 £27,000 Employers will not be able to spend an unlimited amount of money on a single apprentice. Funding bands will be set which limit the amount of levy funds an employer can spend on training for an individual apprentice. The band will vary according to the level and type of apprenticeship (e.g. more expensive, higher quality training likely to be in a band with higher limit). We want to ensure that apprenticeships represent the best quality and value for money to the employer. Setting limits to the amount of government or levy funding that can be used for apprenticeships will enable employers to increase the quantity of apprenticeships they can purchase with their funding, whilst ensuring that quality training does not become too expensive for employers to purchase.   Employers can negotiate the best price for the training they require directly with training providers. We would encourage employers to seek the best price for the training they are purchasing. Much like all business investment decisions, employers should be empowered to get a quality service for an acceptable price. If employers want to spend more than the funding limit themselves then they will be free to do that.

Next Steps In August we published apprenticeship funding proposals. We also published a survey (insert link), inviting employers feedback and insight to help shape the policy as we move forward. Further information will be available later in 2016: October 2016 the final levels of funding, government support, 16 to 18 payments, and English and maths payments for apprentices starting from April 2017 full, draft funding and eligibility rules December 2016 final detailed funding and eligibility rules further employer guidance from HM Revenue and Customs (HMRC) on how to calculate and pay the apprenticeship levy