What does the Apprenticeships Levy mean for Schools?
What is the Apprenticeships Levy?
From April 2017 Brighton & Hove City Council will be paying the government’s new Apprenticeship
Levy.
The Levy is a payment that will be collected from large employers in both the public and the private
sectors. The payment is paid to the HMRC via PAYE returns that can then be accessed by the
employer to fund apprenticeship training for new apprentices or apprenticeships for existing staff to
learn new skills. Schools where Brighton & Hove City Council are deemed to be the employer are to
be included in the levy.
The purpose of the levy is to encourage employers to invest in apprenticeship programmes and to
raise additional funds to improve the quality and quantity of apprenticeships.
Why is the government imposing the levy?
This forms part of the government’s plan to raise the number and quality of apprenticeships.
The levy is set to raise £3 billion a year (£2.5 billion for England), helping to fund the government’s
target of 3 million apprenticeships in this term.
How much is the levy?
The levy is calculated by size of payroll. Businesses with a wage bill of more than £3 million will be
required to pay the levy set at 0.5% of an employer’s payroll, and every employer gets an allowance
of £15,000 to offset against the amount they owe.
Brighton & Hove City Council will be subject to the levy payment from April 2017 and it will be
payable monthly. Based on 2015/16 the community maintained schools’ contribution is estimated at
£408k.
Where does the money go?
We will be able to access the levy contribution through an online digital apprenticeship service
account. As our levy payments go out monthly, we will start to see funds appear in the digital
account a few working days later. This account will be used to pay for apprenticeships training and
assessment.
Does the government contribute anything?
Yes. As the money goes into the digital account, it gains a 10% top up from the government. That
means for every £1 that enters a business’ digital account it gets an additional 10 pence.
Is there a time limit on spending the funds raised in a digital account?
Yes. Funds that accrue in our online digital apprenticeship account will expire 18 months after they
appear unless they’re spent on apprenticeship training. This applies to the 10% top-up too.
Will schools be able to access the digital apprenticeship service?
Yes. It will be available to help you do the following:
 select an apprenticeship framework or standard
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choose the training provider or providers you want to deliver training
choose an assessment organisation
post apprenticeship vacancies
Management of the levy funds will be held centrally and there will be advice & guidance from the
council to help you manage your levy allocation.
Brighton & Hove City Council is not the employer of our school, what does that mean for us?
The levy will be calculated on the payroll size of each PAYE account held with HMRC. Currently all
voluntary aided and community maintained schools are part of a single PAYE account for Brighton &
Hove City Council with HMRC, meaning that from an HMRC perspective Brighton & Hove City Council
is the employer. This method of operating payroll services offers economies of scale currently
reflected in the payroll services to schools SLA but will result in an additional £85,000 levy payment
(based on the payroll for all voluntary aided schools combined).
We are currently exploring the costs of providing voluntary aided schools (where the school is
determined to be the ‘employer’) with their own payroll and PAYE account. If the pay bill of the
school is less than 3 million this would place them outside the scope of the levy. If the school does
have to pay the levy they would be eligible for the £15,000 allowance. The additional costs of
running separate payrolls would have to be reflected in the charges to voluntary aided schools.
Voluntary aided schools would need to register with HMRC as their own employer and contract with
the council to act as their payroll agent.
If you become a non levy payer a new funding system will be in place from April 2017 to fund
apprenticeship training. To begin with you will choose the apprenticeship you want, and the training
provider you want to deliver it, and you will agree a cost for the training with the provider. The
government will then ask you to make a contribution to the cost of training and government will pay
the rest up to a cap.
The funding is based on co-invest rules so as non-levy paying school you will pay 10% of the costs,
with government paying the remaining 90% to be managed initially with training providers.
Any schools that become part of a Multi Academy Trust will become liable if their collective paybill is
over 3 million.
What additional incentives are available?
The government will give extra support for apprentices aged 16-18 years of age, 19-24 year old care
leavers and those who have an Education, Health and Care Plan. This will be through an additional
payment of £1,000 to employers and a further £1,000 payment to training providers for additional
costs associated with supporting younger apprentices, young care leavers and young adults with
additional learning needs
For small schools (those with fewer than 50 employees) whose governing body are deemed to be
the employer the government will:
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waive the co-investment requirement for small employers that train 16-18 year old
apprentices
waive training costs where the apprentice is a 19-24 year old care leaver or is 19-24 years of
age and has a Local Authority Education, Health and Care plan.
How much will the training of an apprentice cost?
Every apprenticeship will be placed in a funding band between £1,500 and £27,000. The upper limit
of each funding band will cap the maximum:
 amount of digital funds an employer who pays the levy can use towards an individual
apprenticeship.
 price that government will ‘co‐invest’ towards, where an employer does not pay the levy or
has insufficient digital funds.
The levy cannot be used for salary costs.
Can we negotiate the best price for the training we require?
Yes, funding bands do not have a lower limit. If employers want to spend more than the funding
band limit, using their own money, then they will be free to do that. Due to the size of levy a
procurement process is being developed to source training providers for specific training needs.
Can a degree holder embark on an apprenticeship?
From April 2017 we will be able to use levy funds for degree holders subject to below:
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Employers to be able to use funds in their digital account or access government coinvestment support to train any eligible individual to undertake an apprenticeship at a
higher level than a qualification they already hold, including a previous apprenticeship.
An individual can be funded to undertake an apprenticeship at the same or lower level than
a qualification they already hold, if the apprenticeship will allow the individual to acquire
substantive new skills and the content of the training is materially different from any prior
training or a previous apprenticeship.
What apprenticeships are available for schools?
Apprenticeship Frameworks suitable for schools include, supported teaching & learning, business
administration, IT, facilities management & finance
How do the new Apprenticeship Standards affect the existing Frameworks?
Frameworks are slowly being switched off and replaced by Standards created by employers. The
government’s plan is that the standards system will completely replace the frameworks system by
2020. There will be a transitional phase where equivalent frameworks and standards will run sideby-side as standards are embedded but government has not yet decided how long this will be.
New standards in development that will be of use to schools include School Business Management
and an Executive Education Leadership a postgraduate apprenticeship linked to an MBA. The council
is also in early discussions with universities over new Teaching Apprenticeship Standards.
For further information, please contact:
Carla Butler (Council Apprenticeship Programme Officer)
Families, Children and Learning (Education and Skills)
Brighton & Hove City Council
1st Floor, Hove Town Hall,
Norton Road, Hove, BN3 3BQ
Tel: 01273 291281
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