Let's talk... funding
By Maria Mulholland, Performance and Compliance Lead
After the successful launch of our 'Let's talk...apprenticeships' webinars last week, it was great to continue the series this week with 'Let's talk...funding'.
As Louise Cowling said in her blog, we want to answer the questions we’re most often asked by businesses about employing an apprentice – whether they currently employ one, are considering employing one or simply want to learn more.
This applies acutely to funding as once a business has begun thinking about employing an apprentice, their next question is often: how will we pay for our new employee?
In the 'Let's talk...funding' webinar we looked at all of the different ways in which to fund an apprentice, explained the latest schemes available and covered the new apprenticeship incentives recently released by the government.
If you missed the webinar here are the main points we covered:
Types of organisations and how these are funded?
Levy Paying organisations
In April 2017 the government introduced the apprenticeship levy to create long-term sustainable funding for apprenticeships and to give employers more control to provide their staff with a range of training opportunities.
Companies with an annual wage bill over £3m are required to pay a 0.5% levy on their annual wage bill for apprenticeship training and assessment. These are levy paying employers.
They can access the funding for apprenticeships through their online Apprenticeship Service Account (AS account).
Non Levy Paying organisations
Companies with an annual wage bill under £3m can share the cost of training and assessment for their apprenticeships with government through co-investment. These are non-levy paying employers.
They can access funding via the apprenticeship provider contract until 31st March 2021 or funding reserved via their online Apprenticeship Service Account (AS Account).
Apprenticeships are either 100% funded or 95% funded by the government and 5% co-investment by the employer.
What are the levels of funding associated with co-investment?
For employers with 49 or fewer employees, the government will pay 100% of the cost of employing an apprentice who is aged 16-18-years-old.
For non-levy paying employers with more than 50 employees, 95% of the cost of the apprenticeship is paid by the government and the remaining 5% is paid by the employer directly to the training provider.
How is co-investment paid?
The University of Sheffield AMRC Training Centre contracting team will work with you to set you up as a customer; a purchase order will then be requested and you will be invoiced for the co-investment. The university has two payment plans that you can use for co-investment:
Payment plan 1 – the full amount to be paid up front
Payment plan 2 – the full amount to be split over three years.
There are also additional non-funded costs that you are required to pay, such as £100 per apprentice for Personal Protective Equipment (PPE).
What are incentive payments?
Currently, if an employer takes on an apprentice aged 16-18-years-old (or aged under-25 with an education health care plan) they receive a £1,000 incentive payment.
Additionally, the government have put a new incentive payment in place in response to Covid-19. From 1st August 2020 to 31st January 2021, employers will receive an additional payment of £2,000 for each new apprentice they hire aged under-25 and an additional payment of £1,500 for each new apprentice they hire aged over-25.
So whether you’re a levy paying company or an SME, we can help you find the best route for your company.
Take a look at the other webinars we are running in the ‘Let’s talk…apprenticeships’ series, which will tell you everything you need to know about apprenticeships at the AMRC Training Centre.
This webinar is all about our recruitment service to companies and its benefits. We will talk you through our step-by-step recruitment service, the aim of which is to ensure we match applicants with appropriate employers ensuring that the needs of both are met.
We’ll look at the structure of our Higher and Degree apprenticeships and what benefits and value they can add to your organisation.
This is perfect for employers who are looking at the next generation of engineers for their organisation. You will learn how having an apprentice within your company will benefit your business.
This is our final webinar in the ‘Let’s talk…apprenticeships’ series where we will take employers through everything they need to know when it comes to the government regulations on apprenticeships.