Apprenticeship levy: key considerations for employers and training providers

To coincide with the first wave of apprenticeships funded by the levy starting this month, we take a look at some of the key considerations for employers and training providers delivering apprenticeships from 1 May 2017:

Should employers persuade existing staff to become apprentices? - there is no reason why new apprentices cannot be recruited from existing staff if suitable standards exist.  However, there are a number of issues to consider such as the future of an employee’s existing role and whether these recruits will be guaranteed a job when the apprenticeship ends.

What are the opportunities and risks for training providers? - the advent of the levy presents considerable opportunities.  But with an increasing emphasis on higher and degree apprenticeships and more investment in training programmes, one of the risks is that financial exposure is likely to increase. Some providers are forming consortia to spread the risk and to improve the service they are able to offer to levy-paying employers.

How will the relationship between employers and providers change? - friction between employers and providers may arise over the degree of control they each have over the apprentices, particularly on longer programmes.  Employers will wish to retain the right to hire and fire, while providers will wish to guard against the loss of funding if apprentices are dismissed.

What about the relationship with the Education and Skills Funding Agency? - the ESFA will still have a policing role, with the right in some circumstances to claw back money it believes has been wrongly spent.  A good understanding of the funding rules and the circumstances in which the ESFA is likely to intervene is essential.

How much time do we have left to sort this out? - a late concession during the consultation process means that credits to digital accounts will now have a shelf life of two years before they cease to be available to a levy-paying employer.  This means that employers have some additional time to plan and implement any changes to apprenticeship programmes.  However as soon as providers and employers start delivering new apprenticeship programmes after 1 May 2017 these will need to comply with the new funding rules. 

Please note that this is an edited version of a briefing published earlier on our website which can be found here: http://www.mills-reeve.com/apprenticeship-levy-five-key-questions-for-employers-05-08-2017/

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