The government’s long-awaited proposals for the new system of funding for apprenticeships confirm that most employers will only have to contribute 10% towards an apprenticeship from April 2017.

Under the plans, employers that are too small to pay the levy – those with annual wage bills below £3m (around 98% of employers in England) - will have 90% of the costs of training paid for by the government.

Companies with fewer than 50 employees will have 100% of apprenticeship training costs covered for 16-18 year old apprentices.

Other proposals for the new apprenticeship funding model, which come into force from April 2017, include:

• Extra support - worth £2,000 per trainee - will be available for employers and training providers that take on 16 to 18-year-old apprentices split equally between employers and training providers.
• Levy-paying employers (with a pay bill of over £3m) that want to spend more on training than is in their digital account - will receive 90% of their additional apprenticeship training costs from government.
• The proposed apprenticeship funding system will be made up of 15 bands, each with an upper limit ranging from £1,500 to £27,000. All existing and new apprenticeship frameworks and standards will be placed within one of these funding bands.  This single funding band for individual framework pathways will replace the current system of pricing apprenticeship frameworks at three different levels depending on the age of the learner.
• English and maths funding at Level 2 will not require an employer contribution and will remain at the current funding levels.
• Levy funds can be used for employees whose main place of work is England whether they live in England or other parts of the UK.
• A new register of training providers - created by the Skills Funding Agency - will be introduced from April 2017; employers will determine what training their apprentices receive and what provider they receive it from.