Employers who don’t pay the Apprenticeship Levy need to start reserving their apprenticeship funding for new starts in 2021-22.
From 1st April 2021, non-levy paying employers must reserve funding for apprenticeships in advance. Before this date, if you wanted to start an apprentice, it was a simple matter of working with a training provider that had a contract for the delivery of non-levy apprenticeships, and the provider took care of the funding. Now you will need to take action each time you wish to recruit a new apprentice or put an existing member of staff on an apprenticeship.
The Education & Skills Funding Agency (ESFA) now requires employers to reserve the funding needed for training and assessment, and this can be done up to six months in advance. Starting from 1st April 2021, reservation levels will be reset to 0 and employers will then be able to make up to 10 new reservations for the financial year 2021-22.
Why do I need to reserve my funds?
As an employer who doesn’t pay the Apprenticeship Levy, reservations give you the certainty that the government will pay for apprenticeship training. The ESFA will monitor the number of reservations used by non-levy paying employers; they may pause reservation capability during the financial year to ensure that the programme overall remains affordable.
So if you are not a levy payer and are considering apprenticeships as a way to bring skills into your organisation in the next six months don’t miss the boat – reserve funding now!
When can reserved funds be used?
Once you have reserved funds they are available to use from the selected month of the apprenticeship start date (which can be up to six months away) and for the following 2 months. The reservation will expire at the end of the 3rd month after your selected start date if they are not used.
Nothing else about the funding has changed, so you’ll still need to co-invest 5% towards the apprenticeship training and assessment costs and the government funding will cover the remaining 95% of the cost. How many other investments give that sort of return? It really is great value!
If you are lucky enough to benefit from a levy transfer from another organisation you will need to ensure that you have an apprenticeship service account so that the transferring organisation can make the transfer. You don’t need to reserve funding for apprentices funded through a levy transfer.
How do I reserve funding?
You’ll need to set up an apprenticeship service account if you don’t already have one, then log in.
Next, go to the ‘Finance’ section of your account.
To reserve funding, for each apprentice (the funding needs to be reserved individually), you’ll need to have to hand:
- which apprenticeship standard the apprentice will be working towards
- what month the apprenticeship training is planned to start
If this information changes before an apprentice starts their training, you can change the apprenticeship start date and the apprenticeship standard they’ll be working towards from your account.
Help is on hand!
If you’d rather have less administration to do, you can give your training provider permission to reserve the funding on your behalf – giving you one less thing to worry about. This is done through the apprenticeship service account, so you will still need to get that set up first of all (we aren’t allowed to do that for you).
The Executive Development Network (EDN) is a leading national specialist training and apprenticeship provider for management and leadership. We’re experts and understand the ins and outs of the current apprenticeship funding landscape – helping you to make the best training and funding decisions for your business.
To find out more about understanding the non-levy apprenticeship funding reservation requirements, or to have a chat about your business’ training needs, please email EDN at email@example.com.
To find out about the latest funding support including the £3,000 incentive for hiring a new apprentice, download EDN’s latest E-guide Funding to Fire Up your Business.