The final funding policy for the apprenticeship levy has been announced by Justine Greening, Secretary of State for Education, clarifying details such as how long employers will be given to spend the funds in their digital account.

The announcement also includes information on how employers will be able to transfer their digital funds to other businesses in their supply chains, sectors or training agencies from 2018.

The levy is being introduced as part of the Government’s commitment to create three million apprenticeships by 2020, and is expected to raise £3bn annually across the country. From April 2017, employers with a pay bill of over £3m a year will have to pay 0.5% of their payroll costs towards the levy. 

Today’s announcement included the following details:

  •  Higher funding for STEM apprenticeship frameworks and higher pricing of apprenticeship standards to support improved quality, and greater flexibility to train those with prior qualifications;
  • Longer period of time for employers to spend funds in their digital account, now with 24 months before they expire, an increase from our original proposal of just 18 months;

  • A commitment to introducing the ability for employers to transfer digital funds to other employers in their supply chains, sector or to Apprenticeship Training Agencies in 2018, with a new employer group including the Confederation of British Industry, Federation of Small Businesses, British Chambers of Commerce, Charity Finance Group and EEF – the Manufacturers’ Organisation – to help government develop this system so that it works for employers.

  • 90% contribution from government to the cost of training for employers that will not pay the levy;

  • 100% contribution from government to the cost of training for small employers that will not pay the levy and who take on apprentices who are 16 to 18 years old, 19 to 24 year old care leavers or 19 to 24 year olds with an Education and Health Care Plan;

  • £1,000 each from government to employers and training providers when they take on 16 to 18 year olds, 19 to 24 year olds who were in care or who have an Education and Health Care Plan;

  • Help for training providers to adapt to the new, simpler funding model through an additional cash payment equal to 20% of the funding band maximum where they train 16 to 18 year olds on frameworks;

  • A simplified version of the current system of support for people from disadvantaged areas to ensure the opportunity to undertake an apprenticeship is open to everyone, no matter where in England they live, their background or family circumstances.

Jayne Worthington, Managing Director of The Skills Company said: “We welcome the additional details announced in today’s proposals. It will enable the Skills Company to continue working with employers to plan for the introduction of the levy to ensure that they get the most out of their investment.”

To find out how The Skills Company can help your business prepare for the levy and to book a free consultation, phone 0161 233 2656 or visit